This week, Business Insider published an honest review of the realities of Mom and Dad living longer titled Eldercare is crushing families' finances. It won't get any cheaper. Yes, more time with Mom and Dad, more time caring for them, and more worries about how we’re all going to pay for it. The Sandwich Generation.
“Eldercare costs have skyrocketed in recent years, and millions of Americans are unprepared. The price of nursing homes and adult day services has increased faster than overall consumer prices, as well as food, electricity, and shelter, over the last three decades. Price hikes in assisted living, at-home care, and nursing homes have left families scrambling to cover costs.”
We can opt for a lower standard of care, but is that really the answer? Most would, uncomfortably, admit No. And yet, the “growing eldercare cost crisis is taking a toll on families, upending lives, derailing careers, and depleting family members' finances so much that they may not be able to pay for their own future care needs.”
Estimates vary, but it is safe to assume that the cost for Eldercare is $100K+ annually. Above what we’re already paying to live our own lives. Beyond a family member making less money to provide help. After taxes. Beyond college for the Next Generation. And before we might save for our own retirement and long-term care needs.
So again, how are we going to pay for all of this? Per the article, families “have cobbled together money from home equity, family contributions, and loans, or, in some cases, have left their jobs to care for loved ones themselves. ‘Roughly 70% of adults over 65 will need some form of long-term care during their lifetime, yet relatively few have planned financially for that possibility,’ said Samir Shah, CEO of care navigation platform CareScout.” And these costs are soaring past rising inflation:
Homecare costs are also rising while roughly “59 million Americans care for loved ones, 48 million of whom are unpaid, an AARP and the National Alliance for Caregiving report showed.” The vast majority of that unpaid work tends to fall on the eldest daughter, which is both noble and cruelly unfair simultaneously, and 40%+ are aged 45-65. Or as we like to say, all of us in the Sandwich Generation.
So, what to do? How will we know if we can afford it when Mom and Dad live longer? How can we ensure they have the opportunity to live their lives well and ride off into the sunset as they wish?
First, we need good family conversations that discuss their dreams and the estate lovingly, with care and honesty. We need to organize the estate to ensure that we can optimize it for these realities. We need to do the work now so we are prepared for the inevitable tomorrow. We can help ourselves and our families move forward…