I’m a Gen X Finance Expert: 5 Things You Should Know Before You Take On Elder Care
Written by
Cindy Lamothe
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Amber Barkley
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There are few things as important in life as taking on elder care. For Gen X, this is a particularly overwhelming experience with many emotions attached, and being properly informed should take priority — not least because it will affect your finances.
GOBankingRates spoke with Gen X finance experts Kelly Augspurger, long-term care insurance specialist and certified senior Aadvisor at Steadfast Insurance, and Max Avery, chief business development officer at Syndicately, to discuss the top things to know before you take on elder care.
What Does Elder Care Mean?
“It’s important for us to define long-term care (LTC), aka extended care, before discussing planning for it,” said Augspurger. “Needing extended care does not mean a person is flat on their back in a hospital bed.”
She explained that it means an aging family member needs either physical assistance with Activities of Daily Living — transferring, toileting, bathing, dressing, eating or continence — or supervision throughout the day due to a cognitive impairment, like Alzheimer’s, dementia or Parkinson’s.
“They may need standby assistance — someone within arm’s reach — or hands-on assistance, and this care is expected to last more than 90 days,” she explained.
Augspurger continued that there are many things to consider when planning for extended care for aging loved ones or parents. “Many Gen Xers (ages 44-59) have parents or aging loved ones who are in their early 70s-90s, and they are trying to navigate their care needs.”
Common struggles they face, she explained, are figuring out who is going to provide care for their family members, where they’re going to receive care, how they will pay for care, and end of life planning. “Without prior experience or someone to guide them, it’s often a time-consuming, exhausting endeavor.”
Below, experts outline what to know about elder care and how to go about it.
Know What Your Aging Family Member Wants — and What You Want
Augspurger noted that adult children — Gen Xers — need to talk to their aging family members before a crisis, like a catastrophic fall, happens or as mobility decreases to come up with a plan. “They need to discuss who is going to provide care. Will they rely on paid professionals, family or a combo?”
She pointed out that relying more on family could mean those family members would need to take time off work or even permanently reduce their hours or quit their jobs. It’s important to talk about whether you’re willing and able to do that. She emphasized that the physical, mental, emotional and financial consequences of caregiving are not minimal.
“Most parents I serve say they don’t want to be a burden to their kids, and they don’t want to rely on them to physically provide care,” she said. “They would rather their kids be care managers instead of caregivers. They’d like to rely on professionals to do most of the caregiving, and then, if their adult kids can pitch in occasionally, that would be ideal.”
Augspurger explained this would then mean kids are making phone calls, picking up meds, visiting before or after work, dropping off meals, etc. “When families can pay professionals to do the physical daily caregiving, it relieves enormous pressure on the adult kids.”
She also noted that when family members are mostly relied on for caregiving, there is typically caregiver burnout. “They exhaust themselves physically by providing care without training and often don’t take enough breaks. This leads to mental burnout and stress.”
She added they also often neglect their own health by not going to the doctor as frequently, not sleeping as much, not eating healthy well-balanced meals, etc. “So if we can avoid or minimize this caregiver burnout, it’s a win for all involved!”
Know How Care Will Be Paid For
According to Augspurger, care costs vary depending on where you are in the country, how much care you need, and what type of care you need.
“National median care costs are approximately $6,300 per month for part-time — 44 hours a week — home care, $5,300 per month for assisted living and $9,700 for a private room in a skilled nursing facility, according to Genworth’s Cost of Care,” she explained. “Will they self-fund, use LTC insurance, VA benefits, rely on the government through Medicaid or a combination?”
She explained that typically, the most efficient and effective way to pay for care is a combo of using LTC insurance and self-funding. “LTC insurance can provide great leverage, guaranteed income, tax-free benefits, protection of legacy and income/assets/capital, predictability, liquidity, and professional services and other benefits, like care coordination, caregiver training, home modifications, respite care, caregiver training.”
Understand Hidden Costs
“I would point out that caregiving involves hidden expenses, like transportation, home modifications or lost income from reduced work hours, beyond medical bills,” said Avery.
He recommended creating a comprehensive budget that factors in these less obvious costs and exploring financial assistance programs to reduce the burden. “For instance, Medicaid offers programs that may cover home modifications, while the Family and Medical Leave Act allows you to take unpaid leave from work without losing your job.”
Recognize Early Signs of Financial Elder Abuse
“In my experience, quiet scams and financial exploitation are common among the elderly,” Avery said. “Be vigilant about unexpected transactions, changes in financial documents or unfamiliar individuals influencing their decisions.”
He suggested setting up alerts for large withdrawals or unusual spending, such as new credit cards or frequent withdrawals. “I often advise clients to limit access to their elders’ financial accounts or work with a trusted third party to monitor their finances.”
Familiarize Yourself With Insurance Gaps
According to Avery, most seniors assume that Medicare will cover long-term care costs, but it only covers up to 100 days of skilled nursing care.
“Medicare and other insurance policies may not cover all elder care needs, such as long-term in-home care or certain medical equipment,” he explained. “I recommend researching supplemental insurance or alternative resources, like state assistance programs or veteran benefits, to fill these gaps.”
He said his best tip is to consider factors like inflation protection, elimination periods and benefit amounts when choosing the right policy.
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