One in ten parents in the US are also caring for an adult, whether it be a parent or grandparent. As our parents age, it becomes increasingly important to have a plan to take care of them. Should they live in a retirement home? Or live with you? Or downsize? These are all questions you may need to help them with. Depending on the number of siblings you have, you may be sharing the burden or you may carry it alone. Helping parents with healthcare is a major concern that many people are financially unprepared for.
Medicare and Medicaid
Once your parents turn 65, they can enroll in Medicare to cover their healthcare. While it covers a number of things, it isn’t free. If parents do not have a lot of assets in their name, they can instead enroll in Medicaid, which is free. Additionally, you can transfer assets out of a parent’s name so they can enroll in Medicaid. Make sure you understand the ins and outs of Medicare when making these decisions.
One thing not covered by Medicare is long-term care. Long-term care refers to the medical and non-medical care of someone who cannot take care of themselves because of a chronic illness or disability. Long-term care is expensive, and unfortunately, so is the insurance that covers it. Medicare may cover the medical care, but the non-medical care is much more commonly needed and is not covered by Medicare. Lower-income Americans can use Medicaid to pay for LTC, and wealthier Americans might just pay it, which puts middle-class families in a tough spot with few options. Do they try to pay it themselves? Buy LTC insurance? Research all your options and know what is available to you.
When a loved one dies, there are a number of financial items that need to be taken care of that can add more stress to an already stressful time. It will be a lot easier if you have everything in order before your parents pass away. If you can, sit down with your parents and find out where all their accounts are, if they have a will and where it’s located. This will decrease the amount of searching you’ll have to do later on and eliminate assets getting lost. We’ve outlined the first things you should do when a loved one passes to help get you started.
There are many things to consider as your parents age, and we cannot express enough the need to plan ahead and weigh the various options available to you. There are strategies and insurances that can assist with the planning process, and their pros and cons need to be appropriately weighed.
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