Over 40 million Americans provide some form of care for aging parents, and while the majority of that is nonfinancial, 28% provided financial assistance. Of those providing financial assistance for elder care, nearly half (43%) say the financial help was for a recurring expense.¹

For adult children providing financial assistance, and for those who may be doing so in the future, these unforeseen expenses can place added strain on family budgets, college affordability and saving for retirement.

Yet, it’s a responsibility that’s hard to ignore. Which is why tapping every available resource is so important in getting older parents the care they need without weakening your financial health.

Strategies for Funding Elder Care

It’s important you first assess your parents’ needs and their associated costs. These expenses can vary widely depending on the care your parents require, which can range from a weekly visit from a nurse or housekeeper to in-home care giving or an assisted living arrangement.

Begin your funding search by contacting your Area Agency on Aging, a county-level government office that can connect you with local resources and government programs.

Your parents’ income and savings are, of course, one important source of funding. Determine if they are sufficient to meet care giving expenses on a sustained basis. If they are inadequate, ascertain the extent of financial help that family members can provide.

Determine whether your parents own a long-term care insurance policy. If they do, review the policy to see what expenses the policy covers.

An existing life insurance policy may be another funding source. Older parents may have life insurance policies that were taken out to cover financial risks that no longer exist. In such cases, consider the option of selling it to a third-party buyer or surrendering it for its cash value. A newer policy may have a long-term care rider, so review the policy for that potential benefit.

Working adult children may also want to check with their Employee Assistance Program at their place of employment. Some programs offer discounts on care giving products and services.

Your parents’ home may have substantial untapped equity. The use of a reverse mortgage may be one option to convert that equity into cash, allowing them to remain in the house for as long as they live.

Finally, if your parent suffers from a specific disease, e.g., Alzheimer’s, contact the related disease organization/association to access any potential financial resources that may be available.

Source:

1. https://www.pewresearch.org/short-reads/2015/11/18/5-facts-about-family-caregivers/#:~:text=There%20are%2040.4%20million%20unpaid,the%20Bureau%20of%20Labor%20Statistics.

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