While it might be common to hear stories about an adult child helping to provide care for their aging parent, what is the impact for those who care for both parents at the same time? Such is the subject of a recent Time Magazine, Money column. The toll of caring for both parents can take more than double the emotional and financial stress, according to the article.
Consider the expenses: according to Genworth Financial’s annual Cost of Care study, the average annual cost associated with sending an elderly parent to an assisted-living facility is about $43,200 and that number can climb to approximate $91,250 for a private room in a nursing home environment. And remember, these costs are just for one patient.
A reverse mortgage loan can help cover the costs related to assisted living expenses for one parent or perhaps in-home care when both parents require it, according to the article. Reverse mortgages are loans that help senior homeowners over the age of 62 tap into the equity in their homes and convert it into cash to use in retirement. With a reverse mortgage loan, monthly mortgage payments do not need to be made, so adult children of senior homeowners can use that money to pay for required care, rather than using their own, sometimes limited, resources.
A recent Northwestern Mutual report found that 38% of surveyed adult children have not adequately planned for the financial responsibilities associated with caring for elderly parents. This is especially true if an adult child must care for both parents at the same time.
Because older generations are living longer and younger generations are facing economic difficulties, younger baby boomers in their 50s and 60s could find themselves shouldering the weight of providing financial support to both their aging parents as well as their struggling adult children.
This “Sandwich Generation” may also have young children who are dependent upon them for every day needs, while aging parents concurrently need to be cared for as well.
In order to balance caring for their own children as well as their parents, the article touches on a few actions that those who are part of the “Sandwich Generation” can take. One suggestion is to keep the lines of communication open and make the time to discuss expectations of aging parents in the event of illness—in advance. While these conversations can be sensitive in nature, it is important that everyone is clear on the level of treatment desired in the event of a life-threatening health issue. It is also critical that parents clearly identify who in the family will have power of attorney to make important medical and financial decisions if and when a crisis strikes.
In addition, adult children should fully consider the true cost of becoming a caregiver themselves. Taking on this role could negatively impact their own careers, retirement savings, and mental and emotional health in order to do tasks that case managers and nurses could perform for a fee. Oftentimes, spending the money to hire a professional care provider is less expensive than trying to juggle a career with caregiving responsibilities.
Lastly, the article addresses that a reverse mortgage loan may help aging homeowners and their adult children by providing the funds needed to afford in-home care, case manager services, and other required care expenses.
Read the full Time.com article here.
To learn if a reverse mortgage might help you and your parents cover possible future care costs in retirement, call a knowledgeable reverse mortgage professional at American Advisors Group at 1-888-998-3147.