Help Aging Parents Prepare for Their Shifting Needs

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Three factors to consider before a loved one needs long-term care.

Have you talked to your aging loved ones about their financial needs in the coming years? According to the American Association for Long-Term Care Insurance, 68 percent of Americans ages 65 and older will eventually need long-term care, often at an exponential cost.

Genworth’s Cost of Care Survey found that a private room in a nursing home cost $8,821 per month in 2021, compared to $4,300 a month for care in an assisted living facility and $150 per day for services from a home health aide.

Planning ahead for these eventual expenses can help your parents remain financially stable even if one or both of them needs skilled nursing care or other types of assistance.

We’ve compiled a guide to planning for financial needs as family members age.

Explore Insurance Coverage

Some older adults qualify for health insurance through Medicare or Medicaid. While these programs do not cover long-term care, they may cover related services. Every state has its own eligibility qualifications for Medicare and Medicaid. Your parent may need to “spend down” assets if they need care and exceed the eligibility limit.

Many seniors purchase private long-term care insurance through an independent provider. This type of policy can fill in the gaps of your parent’s existing Medicare, Medicaid, or private health care insurance policy. That said, decline rates for such policies increase dramatically as you age, and the landscape continues to evolve as states like Washington introduce their own plans.

Check your parents’ life insurance policies. Some include “living benefits,” which cover a portion of long-term care expenses. However, these policies often have limitations; for example, they may only cover long-term care for someone who has a terminal illness.

Review Alternative Options

Many families decide to fund long-term care and other costs associated with aging through savings and investments. If your parents are in a position to use this approach, ask about cash-pay discounts when the time comes for a nursing home or care arrangement.

Did either of your parents serve in the military? In this case, they may qualify for the VA Aid and Attendance Special Pension. Currently, this federal benefit provides nearly $2,000 per month toward the cost of long-term care.

If your parent lives alone and owns a home, they can sell the property and use the equity for long-term care.

How to Talk Money With Family

Select a Nursing Home or Assisted Living Facility

Some people plan to “age in place” or stay in their own homes even when they need long-term care. If your parents have this goal, research the cost of home health agencies during the financial planning process. Often, a healthy spouse provides care for a spouse who becomes ill or disabled, but having the resources to seek assistance for the caregiver can make a big difference in quality of life for both parents as they age.

If your parents do not own a home that will meet their needs as they age, they may want to instead plan for a nursing home or assisted living facility. Explore options in your area and tour the facilities with your parents so they can express their opinions and ask questions. Review the cost of properties that fit your family’s needs so you can plan for these eventual expenses.

While it can be difficult to bring up these sensitive issues with your aging parents, doing so can prevent the need to raise money and make plans for care quickly if they become seriously ill or disabled. With this guide, we hope to take some of the mystery out of planning for long-term care.


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