How to Start Elder Care Planning for Aging Parents
It’s never too early to start elder care financial planning
By Melissa Willets
It’s not easy watching your parents age. It’s even harder when you find yourself in the position of making decisions about their elder care planning and how to pay for it. If you’re facing this situation, you aren’t alone. Seventy percent of people over age 65 will need some type of long-term care in their lifetime, and it often falls on their children to make the arrangements.
Resources, like geriatric care management experts, can provide guidance with crucial financial and medical care decisions for your aging parents. But if you prefer to do the necessary elder care financial planning on your own, you’ll need to consider:
- What type of senior care will your parents need, if any?
- Will their health situation dictate the type of housing they’ll need?
- How will you pay for everything?
- What will you need to document your plans?
To help you answer these questions, we’ve created a list to get you started.
Types of senior care
Care can range from minimal assistance at home to full medical care in a facility, and of course, the more help that is required, the more the senior care costs.
Virtual companion care
This type of senior care is relatively new. It offers virtual companionship and security via internet monitoring for a minimal fee.
Non-medical home care, custodial care, or long-term care
These three terms can be used nearly interchangeably. They refer to assistance with daily-living tasks, like preparing meals, dressing, and bathing. Because they’re not medical in nature, a non-licensed individual is able to perform them. Non-medical home care is performed in your parents’ house and costs less than custodial care provided in an assisted living community or nursing home.
Adult daycare
This is a drop-off service that provides care for your parent while you’re working. Two versions of adult daycare are available – social and healthcare. Social care does not offer medical assistance, but adult day healthcare does; therefore, it costs more than social daycare.
Skilled care
Skilled care requires a licensed professional to provide medical care. Assistance can range from administration of medicines to operating medical equipment. It can take place in your parents’ home, known as home healthcare, or in a skilled nursing facility.
Memory care
Memory care is specifically for individuals with dementia or Alzheimer’s disease, and it takes place in facilities that include added security to prevent patients from wandering off alone. Because of the extra attention required, it generally costs more than the care provided in assisted living facilities.
Palliative care
This type of care focuses on relieving pain and suffering rather than curing or treating. It’s usually associated with hospice facilities, but not all people who receive palliative care are in hospice. It can be performed by medical professionals in patients’ homes or residential facilities, and the costs vary widely by location.
Hospice care
Hospice is end-of-life care for individuals who are suffering from a terminal illness. Palliative care methods are usually used in conjunction with other care. This type of care can be performed by medical professionals in patients’ homes or hospice facilities. Costs vary by location.
Senior Housing Options
Ideally, you’ll want to keep your parents in their own home as long as possible, not only for their solace but also to lessen financial strain. When they’re no longer able to live on their own, you’ll want to find housing that will make them comfortable and secure. Like types of care, housing options range from providing little assistance to full skilled care, and their prices correspond with their levels of senior care.
Independent living
A community of this nature provides seniors with plenty of independence, but offers security, socialization, transportation, and meal services.
Assisted living
An assisted living community offers seniors a home-like setting with socialization, assistance with everyday living tasks, and medical care.
Memory care facility
These residences are similar to assisted living facilities, but they are for individuals with Alzheimer’s or dementia and offer more security measures to prevent patients from leaving on their own.
Nursing homes
With 24-hour skilled nursing services and doctors on-call, nursing homes offer more comprehensive medical care for seniors who need it, while also providing organized social activities and meals.
Continuing Care Retirement Communities
In a campus-like setting, these communities offer tiered housing options for aging people, including independent living, assisted living, and nursing homes.
Elder Care Financial Planning
Your family’s financial situation often determines the senior care and housing choices you make in elder care planning. For instance, if your parents have set aside money for long-term care, they may be able to afford high-end options, like Continuing Care Retirement Communities. If your parents have a lower income, they may be able to receive government assistance based on their care needs and geographical location.
Senior care financing generally comes from four categories of resources:
- Government programs: Social Security, Medicaid, veterans’ benefits, and state programs
- Insurance coverage: Medicare, life, and supplemental, such as Medicare Supplement
- Private assistance: nonprofits and foundations
- Personal property: family resources, home equity, and private loans
Paying for Senior Care lists myriad of resources available to assist with financial planning. They range from tax credits and deductions to specific foundations’ patient assistance programs.
Elder Care Planning Documents
Each financial program you apply for will have its own set of paperwork to fill out, such as an Assisted Living Medicaid Waiver or Social Security benefits questionnaire. You will also need to draw up basic documents to help you properly care for your parents, especially as their health declines and if they haven’t completed their estate planning.
HIPAA authorization
Your parents will sign this form to allow providers to share their medical status with you and other designated family members.
Medical power of attorney
If your parents become seriously ill and unable to make decisions, this document empowers you to make medical decisions on their behalf.
Financial power of attorney
Similar to the medical power of attorney, this document, also called a durable power of attorney, allows your parents to designate you to make financial decisions on their behalf.
Advance healthcare directive
Generally known as a living will, an advance healthcare directive will list whether your parents wish to be kept on life support if there is no reasonable chance of their recovery.
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