It is common for adult children to care for their parents as they grow old, but must that include financial assistance? A number of Americans fear that it may — and that they won’t be able to cover the expense of their aging parents. The main driver of concern right now? Inflation.
According to a new survey from American Advisors Group (AAG) that consulted 1,500 adult children between the ages of 40 and 55, 62% are worried about how inflation is affecting their parent’s finances; 43% fret over their parents’ financial status as a whole and 35% worry that their parents’ financial problems will become their own burden.
The widespread concern over inflation and how it impacts seniors certainly isn’t unprecedented, as it does deal a particularly harsh blow to retirees who are likely to live on fixed incomes such as Social Security and pensions. They may also be dependent on the value of stocks and bonds that are taking a downturn during these economically rocky times.
The survey also found that 50% of adult children plan on moving their parents into their homes in the future, while 55% say they are not financially prepared to care for their parents. Fifty-nine percent of adult children said they could afford neither in-home care or an assisted living facility for their folks.
Somewhat surprisingly, given the level of concern, 44% of adult children have not discussed finances with their parents and 50% don’t know how much debt their parents are in. Additionally, 76% haven’t talked with their parents about using home equity to fund their retirement or care, though 60% are in favor of using home equity to do just that.
Finally, 74% of adult children would rather have their parents live at home with them than in a nursing home or other long-term facility — which is fortunate considering that’s a pretty likely scenario despite one’s admitted inability to afford it.
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Sounds like it’s time for some healthy and honest communication about money with our folks, especially since it doesn’t look like things will improve economically for a while. Though inflation appears to be slowing down, it’s still unwieldy, and will likely be an issue for another two to three years.
As a result, families have to make some tough choices and, in many cases, some costly ones. Caregiving isn’t cheap, averaging $7,242 a year according to recent research from AARP.
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