Caring for Your Aging Parents' Financial Life

How to address the challenges and create a workable plan

When adult children become caregivers for aging parents, many are grateful to have a way to repay a lifetime of financial and emotional support. In one recent survey, almost 6 out of 10 Midwesterners said they felt that children have an obligation to care for their parents†, and in another study, 68% of respondents said that helping their parents brought them closer.

Yet the logistics can quickly become overwhelming. Jill Garvey, senior wealth strategist at Huntington Private Bank®§, mentions a family in which one parent has an aggressive form of dementia, and the other parent is striving to coordinate care with the children, all of whom live several hours away. Ensuring the parent’s safety, and the long-term financial responsibility for the care, is complicated—and while it's under control now, it still requires almost constant review.

A widespread problem

Many caregivers and adult children struggle with situations like this, in which they may live far away and communication may be a challenge. Managing parents’ complex health issues, particularly from a distance, can be time-consuming, difficult, and costly. The average annual cost of health care ranges from $52,624 for a home health aide to $102,200 for a private room in a nursing home—most of it not covered by Medicare#. According to one recent study, 62% of those surveyed acknowledged that the cost of caring for their parents had affected their ability to plan for their own financial future—and 63% of caregivers said they had no financial plan for covering the cost of their parents’ care during the next five years¥.

Moreover, these financial and logistical burdens are often accompanied by the emotional demands of caregiving. The struggle to balance the care for aging parents with other responsibilities takes a tremendous toll, with 37% of surveyed caregivers providing more than 80 hours of care per week, and 43% needing to take time off from work¥.

All of these challenges can be exacerbated by a lack of “incapacity planning,” which is the umbrella term for measures taken to prepare for such caregiving. Children often don’t want to bring up the subject of a parent’s decline, even when it’s becoming obvious. At that point, commonly, neither parents nor their children have made sufficient preparations, making the situation even more fraught.

“Things that surround incapacity planning have extra emotion packed into them,” says Dan Griffith, senior vice president and director of wealth strategy, Huntington Private Bank. “You go from your parent being someone you can rely on for your own emotional support, and perhaps for financial assistance as well, to someone who is suddenly another dependent.”

Children need to make an honest assessment periodically as to where their parents are, mentally, physically, emotionally.
Jill Garvey
Senior Wealth Strategist, Huntington Private Bank
Coming to grips with the situation now

Whether you’re already caring for aging parents or expect that responsibility to fall to you in the future, there are steps you and your parents can take to help address the financial and emotional considerations. A conversation with your parents and other affected family members can clarify what everyone may be facing.

First things first: “Adult children need to understand what plans their parents may already have in place,” says Garvey.

If your parents’ preparations need further attention, you can work with them, other family members, and your financial advisors to formulate a more comprehensive plan. These questions may need answers: How and where do your parents want to be cared for? What’s the state of their finances? Do they have long-term care insurance, or have they made other provisions to cover the expense of a stay in a nursing home? Don’t lose sight of your own financial planning in this process. A plan should also include contingencies in case you or other caretaking adult children unexpectedly become unable to care for your parents or yourselves, says Garvey.

Key to any plan is communication. Garvey mentions one client whose father had to go to a memory care facility. To manage his care and to support one another, the client and the rest of the family met regularly to discuss who was going to go see him and on which days. In addition, they communicated with and about the client's mother, who while healthy, was feeling the strain.

These meetings helped the family ensure the client's mother had food in the house and someone to visit in her place when she was too worn out. Working together, families can apportion responsibility, working to take advantage of each person's availability and skill.

Moving to long-term focus

Plan in hand, you will likely need to adjust the road map as your parents’ health, caregiver responsibilities, and caregiver situations change.

“Children need to make an honest assessment periodically as to where their parents are, mentally, physically, emotionally,” Garvey says.

The goal is to understand their financial needs and to see that they have the resources they need.

“A lot of that goes back to constant communication,” Garvey says.

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† Bay Alarm Medical. “Caring for an Aging Nation.” January 18, 2018.

National Academy of Sciences. “Families Caring for an Aging America.” Accessed October 2019.

§ Interview with Jill Garvey, Huntington Private Bank. September 2019.

¶ Genworth. “Cost of Care Survey 2019.” August 26, 2019.

# Senior Living. “Medicaid and Medicare Nursing Home Coverage.” Accessed October 2019.

¥ Sollitto, Marlo. “Family Caregivers Bear the Burden of High Elder Care Costs.” June 17, 2019.

Interview with Dan Griffith, Huntington Private Bank. September 2019.

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