A Startling Reality: Your Aging Parent Runs Out of Money
“I never thought I would live this long”.
That’s what Marsha’s mom says about being 97. It’s great that she has survived a heart attack, a broken hip 2 years ago, and a brush with cancer. Aggressive medical care got her through all of those episodes.
Marsha loves her mom, and is glad she’s still around. No one planned for mom being unable to afford her own living expenses. The pension left for mom, calculated 50 years ago, seemed like enough at the time. In today’s dollars, it’s peanuts.
That meager pension and Social Security are all mom has now. And at 97, she needs help with cooking, shopping and taking her bath. One broken hip from that fall in the bathroom was enough to make her aware that she can’t bathe by herself anymore. She is still sharp, and she pays her bills on time.
Mom used her savings to cover the cost of the caregiver who comes in three times a week to help with the basics. It helps a lot, and mom is still able to stay in her own house. Her home is where she feels secure. She is glad to be able to manage there and wants to stay. But in two years, she used up all she had saved.
The recent call mom made to Marsha was a shock: “Dear, I just don’t have enough to pay the caregiver next month.”
Marsha knew mom was getting low on funds, but she just didn’t do anything. The thought was too upsetting and Marsha has enough financial worries of her own. Now, what?
When Marsha called me at AgingParents.com to discuss this, and to try to figure out what to do, I had to deliver the bad news: Though mom is eligible for Medicaid, as she has exhausted her savings, Medicaid may not pay for the caregiver.
Unless mom can get into a special program in her state for low income seniors to get limited help at home, and there are still funds in the program, she may not get any help at all. The county where mom lives has cut funding to this program, which has been scheduled to end three times so far. The “in home support” benefit, which means paid caregivers for disabled elders like Marsha’s mom, may not survive the next round of budget talks.
So what are Marsha’s alternatives for her mom?
There are few choices.
One is to take mom into her own home and sell mom’s house to pay for the caregiver. No one wants that. Marsha loves her mom, but as she puts it, “I’m just not a good caregiver. I don’t have the patience”.
Another option is to pay for the caregiver herself, but that would be a hardship. Marsha is divorced and is struggling to cover her own expenses, much less take care of mom’s expenses.
Mom can go to a small care home, like assisted living but on a very modest scale. She would have to share a room to be able to afford the cost. And Marsha would have to pay the difference between mom’s income and the cost of the home.
Mom could eventually go to a nursing home, a thought which terrifies Marsha’s mom and depresses Marsha. Ironically, in most states, Medicaid will pay for a nursing home, but won’t pay for a caregiver at home to keep an aging parent out of a nursing home. The nursing home is obviously much more expensive than staying in one’s own home. Ridiculous? Of course! Tell your legislators. They can’t seem to agree on much of anything. What are the chances of getting a government funded program to pay for in-home care for seniors to keep them out of nursing homes?
I am working with Marsha to help her through the decision-making process. Her mom is included in the discussion. Mom is clear on one thing: she doesn’t want to move. Marsha just wants to preserve mom’s dignity.
What Marsha is learning is that what we want for our aging parents may be compromised by the economic reality of longevity. Lots of Boomers are supporting their aging parents, in whole or in part.
The takeaway here is this. We may not be able to do much advance planning for aging parents who live into their 90’s and beyond, but we can plan ahead for ourselves.
We see what happens to our parents. We need to work with our own trusted financial advisors and find our own long term strategies. Very long term.
Question of the day: if you live to be 100 (and you just might), could you make your money last that long? Could you pay for all of your own expenses, accounting for inflation, the cost of caregiving, and ups and downs of the market?
Sit down with your financial planner and do some calculations. Be smart. Be realistic. Planning ahead can make all the difference. Few of our parents anticipated such longevity, but we Boomers must consider it to be quite possible. If we’re a rather rebellious generation, let’s rebel against financial dependency for our futures.