Millennials, have a talk with parents about caregiving
Even if your parents are active and healthy, there likely will come a time when they may need a little help.
An estimated 10 million millennials are acting as caregivers for a parent, in-law, grandparent or other adult, according to a recent report by AARP's Public Policy Institute. In time, more millennials will step into this role.
“Economic factors, including the student loan crisis, stagnant wages and the rising cost of elder care, are combining in a dangerous way that makes caring for aging parents different for millennials than it was for previous generations,” says Grace Whiting, president of the National Caregiving Alliance.
The AARP report found that millennial caregivers spend an average of 21 hours a week caring for older adults, and those with out-of-pocket caregiving expenses spend nearly $7,000 a year on caregiving-related transportation, home modifications, legal fees and medical costs, which can put a significant strain on careers and financial goals.
Even if your parents are still relatively young, it isn't too early to ask them what they might need and what they expect of you as they age. Start with their retirement goals and finances — when they hope to retire and where they want to live.
There's no need for them to divulge every detail of their finances and plans. Instead, aim to get a sense of both their financial and physical health, says Jeremy Torgerson, founder of nVest Advisors, in Brighton, Colo. Also ask your parents what their expectations are for later in retirement, when they may need help on a daily or weekly basis — who they hope will provide that assistance and how they'll pay for it.
The cost of paid long-term care adds up quickly. Medicare typically won't cover home health care, adult day care or nursing homes.
The median cost of a home health aide nationwide is $22 per hour, or almost $46,000 a year for 40 hours a week, and a private room at a nursing home averages $267 a day, according to Genworth Finan- cial. Do your parents have a long-termcare insurance policy to cover at least some of these expenses? Or do they plan to rely on other sources, such as savings or the sale of their home, to cover the costs?
To avoid legal and financial problems if an illness or accident occurs, ask your parents where they keep estate-planning documents.
Such topics aren't easy to discuss, and families often need to start small, says Carol Craigie, a certified financial planner in Denver. Talk about general concerns at first and get more specific over time. Kaitlin Pitsker is a staff writer at Kiplinger’s Personal Finance magazine. Send your questions and comments to moneypower@kiplinger.com.