I’m sure we all wish we could drink from the proverbial fountain of youth, but aging is a fact of life, and as long as that remains so, adult children will have to identify solutions that ensure the well-being of their parents. Often referred to as the “sandwich generation”, adult children must actively get involved in “parenting the parent”, plus look after their own children. Yes, that includes the young adults who claim they are “grown” but still ask you for money! If your kids were investments, some of you would be ultra-rich, and I’m sure you are in another sense of the word!

Senior Care

In all seriousness, caring for seniors is not just about them but you as well. Best-case scenario: your parents will be in good health and/or able to live independently. But even if that’s the case, is it sustainable to the very end?

No one knows for sure, but it is wise to have a plan just in case. Failing to look ahead and prepare can cause strain in your personal, family and career life. You’ll want to consider their living status, such as whether they’re living alone and if they live close to you or a supportive relative. Would you consider allowing a parent to stay with you? If not, do they prefer to stay at their home or are they open to another type of living arrangement?

Other types of living arrangements can include:

• Independent Living Communities
• Assisted Living Facilities
• Nursing Homes

Moreover, to help alleviate the load, regardless of where a parent is living, one can consider adult day care (can be offered as adult social day care or adult day health care).

Financial Burden of ADLs and IADLs

According to the Centers for Medicare & Medicaid Services, the activities of daily living (ADLs) – activities related to personal care – are bathing or showering, dressing, getting in and out of bed or a chair, walking, using the toilet, and eating. ADLs are important because they are tied directly to the activation of benefits for long-term care insurance, disability insurance, state programs, Medicaid and certain types of life & health insurance policies.

ADLs can also determine eligibility for admission into an assisted living facility. Then there are IADLs which stands for “instrumental activities of daily living.” IADLs are not as immediate as ADLs but nevertheless warrant the involvement of a caregiver. They include activities such as managing prescribed medications, shopping for groceries, transportation, using technology, preparing meals, managing a household (cleaning, laundry, etc.), companionship/mental support, and managing finances.

Brain Disorders Associated with ADLs and IADLs

Common brain disorders that are responsible for declines in the ability to perform ADLs and IADLs are:

  • Alzheimer’s Disease
  • Amyotrophic Lateral Sclerosis
  • Brain Tumor
  • Epilepsy
  • HIV/AIDS Dementia Complex (ADC)
  • Huntington’s Disease
  • Multiple Sclerosis
  • Parkinson’s Disease
  • Stroke
  • Traumatic Brain Injury

Thus far, we have discussed ADLs in the context of aging but what if a loved one falls victim to disability or illness? Taking these potential scenarios into consideration can be an important part of a sound risk management plan.

Financial Advisor for Aging Parents

Talking with a financial advisor can help make sense of the many decisions a caregiver may face in relation to an aging parent. The idea of parent-child role reversal can leave many caregivers feeling like they are in the twilight zone, but a professional can help plan for the well-being of a loved one.

In order to make decisions on behalf of loved ones – financial or otherwise – caregivers will need to obtain a durable power of attorney. The “durable” part extends the validity of the document in case a parent becomes mentally incapacitated and unable to make decisions on their own. For decisions related to medical treatment, in the event of incapacity or end-of-life care, one can express their values and desires in a set of documents called advance healthcare directives.

Watch the video below, published by NIHSeniorHealth – a service of the National Institute on Aging and the National Library of Medicine (NLM) – to learn more about advance healthcare directives…



How to Budget as a Caregiver

Make a caregiving budget that projects your costs and/or tracks your spending on caregiving. Completing a caregiving budget will also help you manage your own retirement plan, as you should be thinking about how your financial future might be affected by taking care of a parent. Next, organize your parent’s resources and think through how they might be better used to support caregiving activities. A financial advisor can also assist in this endeavor.

Although it may feel uncomfortable for all parties involved, have a conversation with a parent(s) about their desires while they are still of sound mind. There may come a time when you have to make decisions that affect their life and you want to be in a position to respect their wishes versus guess what those wishes might be had they been making the decisions on their own. Did your parents have a 401k or IRA set up in preparation or is it up to you to bear the financial burden?

Family Tension Surrounding Parent Care

Most people probably assume their siblings will provide a healthy level of support in caring for a parent. After all, he or she is their parent too, right? Others have a more pessimistic view of sibling participation, born from past hostilities that may have never been forgiven or perhaps still ensue to this day. Whatever your family dynamics, this is yet another critical area to address sooner rather than later.

Do not underestimate the need among siblings, whether consciously or unconsciously, for love, approval, or being seen as important or competent. It is easy for disagreements to emerge out of emotional feelings instead of placing the focus where it belongs: the costs, desires and responsibilities concerning the care of a parent. These disagreements would likely be most not enjoyable for the parent, who already may be bothered by the fact he/she has become so dependent on you and your brother(s)/sister(s).

Shared decision-making can always be challenging when any group of people come together. Maybe families can take a page or two from businesses who make it a matter of profit and loss to make decisions as efficiently as possible. Usually this involves creating agendas (and sticking to them), not introducing emotion, active listening, and mutual respect regardless of differences. In an effort to make fact-based decisions, it may help to get a professional assessment of your parent’s financial condition, health and potential future needs. All siblings’ input must be valued but participants must not forget the topic of discussion concerns a human being and that the parent has the ultimate say, assuming they are of sound mind (why it is so important to have these conversations early before potential health issues arise).

Last of all, be sure to put everything in writing. Durable powers of attorney, wills, trusts, and advance healthcare directives can all help with avoiding conflicts over legal, financial and inheritance issues. It may also be a good idea to have all relevant parties sign a personal care agreement to outline the terms of compensation if a family member has cut back on employment to care for a parent.

Cost of Healthcare for Elderly

Over the past 15 years, Genworth has developed the Cost of Care Survey to help people understand what they might pay for home health care, adult day health care, assisted living facilities, and nursing home care in localities around the country. Long-term care insurance can assist in part or in full with covering the varying types of care noted above. Medicaid is another popular option but some people may not be eligible due to their household income and asset levels. The American Elder Care Research Organization created a website called PayingforSeniorCare.com that comprises a plethora of resources for interested readers. Click here to view a list of programs they identified that pay adult children to care for their aging parents.

The programs are listed as follows:

  • Medicaid Options
    • HCBS Waivers and 1915 Waivers
    • Medicaid Personal Care Services
    • Medicaid Caregiver Exemption
    • Adult Foster Care
  • Programs for Veterans
    • Veterans Directed Home and Community Based Services
    • Veterans Aid & Attendance Pension
  • Other Options
    • State Based, Non-Medicaid Programs
    • Life Insurance
    • Long-term Care Insurance
    • Paid Family Leave Laws
    • Tax Deductions and Credits

Another elder care organization that provides aging resources specific to your area is the National Association of Area Agencies on Aging.

Financial Statistics on Aging

Below are some interesting statistics I cherry-picked from the Family Caregiver Alliance (FCA) National Center on Caregiving website:

  • A vast majority of caregivers (85%) care for a relative or other loved one:
    • 42% care for a parent (31% for a mother, 11% for a father);
    • 15% care for a friend, neighbor or another non-relative;
    • 14 % care for a child;
    • 7% care for a parent-in-law;
    • 7% care for a grandparent or grandparent-in-law. [National Alliance for Caregiving and AARP. (2015). Caregiving in the U.S.]
  • Distribution of care recipient age:
    • Average age: 69.4 years old
    • 14% of care recipients are 18-49 years old
    • 47% of care recipients are 75+ years old [National Alliance for Caregiving and AARP. (2015). Caregiving in the U.S.]
  • On average, caregivers perform 1.7 of 6 ADLs, most commonly getting in and out of beds and chairs (43%). [National Alliance for Caregiving and AARP. (2015). Caregiving in the U.S.]
  • On average, caregivers perform 4.2 of 7 IADLs, most commonly transportation (78%), grocery or other shopping (76%), and housework (72%). [National Alliance for Caregiving and AARP. (2015). Caregiving in the U.S.]
  • Family caregivers spend an average of 24.4 hours per week providing care. Nearly 1 in 4 caregivers spends 41 hours or more per week providing care. [National Alliance for Caregiving and AARP. (2015). Caregiving in the U.S.]
  • The average duration of a caregiver’s role is 4 years.
    • Only 30% of caregivers provide care for less than a year.
    • 24% of caregivers provide care for more than 5 years.
    • 15% of caregivers provide care for 10 or more years. Higher-hour caregivers are twice as likely to have been in their caregiving role for 10 years or more. [National Alliance for Caregiving and AARP. (2015). Caregiving in the U.S.]
  • Regardless of employment status, unpaid caregivers report that positive activities in their respective daily lives are reduced by 27.2% as a result of their caregiving responsibilities. This effect is three times greater in their personal lives than in their professional lives. [Coughlin, J. (2010). Estimating the Impact of Caregiving and Employment on Well-Being: Outcomes & Insights in Health Management.]
  • Measured by duration of care, Alzheimer’s and dementia caregivers provide care on average 1-4 years more than caregivers caring for someone with an illness other than Alzheimer’s disease. They are also more likely to be providing care for five years or longer. [Alzheimer’s Association. (2015). 2015 Alzheimer’s Disease Facts and Figures.]
    • 57% of caregivers report that they do not have a choice about performing clinical tasks, and that this lack of choice is self-imposed.
    • 43% feel that these tasks are their personal responsibility because no one else can do it or because insurance will not pay for a professional caregiver.
    • 12% report that they are pressured to perform these tasks by the care receiver.
    • 8% report that they are pressured to perform these tasks by another family member. [AARP and United Health Hospital Fund. (2012). Home Alone: Family Caregivers Providing Complex Chronic Care.]


Long-term care (LTC) insurance policies can be complex but there are four key components you want to make sure you understand (at a minimum): daily benefit, benefit period, elimination period, and inflation protection. The daily benefit is, as the name implies, the amount of money the insurance company will issue you on a daily basis. The benefit period covers the amount of years the insurance company will issue payments. The elimination period is the number of days that must transpire before benefits will kick-in (zero-day elimination periods are available in some LTC insurance policies at a higher price point). Inflation protection allows the daily benefit to be indexed to inflation to ensure your benefits keep up with the rising cost of living. You’ll also want to make sure the LTC policy covers home health care, as some insurance companies limit the types of care that can be paid for using insurance dollars.

To learn more, read this informative guide put out by the National Association of Insurance Commissioners (NAIC). Another great resource is LongTermCare.gov.

For more information, check out Basics of Estate Planning or look into our Elder Planning options.

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