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Balancing Your Retirement and Your Parents’ Long-Term Care Needs


It’s important to plan and save for retirement. Yet, plans can quickly unravel when elderly parents need extra care. Long-term care is expensive. When parents can’t afford it, adult children may feel they have to do whatever it takes. Providing parents’ care can have consequences for your own retirement. You can’t prevent your parents from needing care, but you can balance your retirement by communicating and planning.

The High Cost of Long-Term Care

Long-term care can include help with activities of daily living; such as bathing, dressing, and getting to the bathroom. Also, medication management, help with activities related to a health condition, or even help with daily chores can be included.

Long-term care can take place at home, in an assisted living facility (ALF), or in a skilled nursing facility (SNF). Statistics show that assisted living costs $45,000 a year, on average. Meanwhile, you can expect to pay at least $20 an hour for in-home help. Nursing home care costs much more – over $85,000 a year on average for a semi-private room.

Many people wrongly believe Medicare will cover these costs. Yet, for the most part, it doesn’t. Medicare will pay for a limited amount of time in a skilled nursing or rehabilitation facility after a hospital stay. It will cover medical care and some home health services. But Medicare won’t pay for room and board or custodial care.

These non-covered costs make up the majority of long-term care expenses. Medicaid is another option that will pay for nursing home care for seniors with limited assets. However, not everyone needs that level of care, and not every family wants to place their loved one in a nursing home.

Adult Children Caught in the Middle

When parents need long-term care, their children are often in their 50s or early 60s—the same years when the pressure is on to maximize retirement savings. If the parents don’t have the money to fully fund their own care, the children face difficult choices.

Some people – particularly women – retire early to become caregivers to their parents. They’re no longer contributing to retirement funds, and they may draw a lower Social Security benefit at age 62 instead of waiting until full retirement age.

Other families reduce or stop their own retirement contributions, dip into their savings, or even take on debt to help support an elderly parent. With medical and long-term care costs continuing to increase, sacrificing your own retirement savings to take care of your parents is a risky plan.

Planning Is Key

Planning for your parents’ future starts with communication. Find a way to talk to them about their finances – their retirement income, their money, and other assets. Find out if they have long-term care insurance and what it covers.

Try to work together to map out a plan for their care in the future, should they need it. Another way to plan is to set up a consultation with an elder law attorney. These lawyers focus on issues that affect older people, including wills, trusts, Medicaid, power of attorney, and veterans benefits.

An elder law attorney can review your parents’ estate planning documents and explain whether they need updating, advise your parents on strategies to protect their finances as they get older, and help apply for benefits for which your parents might be eligible. If you have siblings, communicate with and involve them as well. This increases the chance that everyone will be on the same page when it comes to helping your parents make decisions about their care.

Taking Care of Yourself is Key to Balancing Your Retirement

Airline safety announcements advise you to put your own oxygen mask on before you assist other passengers. This is a good way to think about balancing your retirement and your parents’ needs. If you haven’t already done so, meet with a financial planner or use an online retirement planning tool to estimate how much money you’ll need in retirement, and what you need to do to be on track to meet that goal.

Being clear on your own financial goals will help you and your parents explore care options that you can all afford. You also must think about how much caregiving you can realistically do, without compromising your own physical, mental, and emotional health.

When you understand your own personal and financial limits, it will be easier to set boundaries without feeling guilty that you can’t do more. Taking care of elderly parents isn’t easy. But by communicating and being proactive, you can plan for their care without sacrificing your future.

Lindsay Engle

Lindsay Engle is the Medicare expert for MedicareFAQ. She has been working in the Medicare industry since 2017. She is featured in many publications as well as writes regularly for other expert columns regarding Medicare. You can also find her over on our Medicare Channel on YouTube as well as contributing to our Medicare Community on Facebook.

2 thoughts on “Balancing Your Retirement and Your Parents’ Long-Term Care Needs

  1. I am trying to get a copy of my summary for yr end 2020. Sites I have visited provide no info. I need it to finish 2020 tax filing

    1. Hi John! If you’re trying to get a summary of your out-of-pocket medical expenses you would need to contact the carrier of your plan directly. You should be able to see claim summaries for Part A & Part B in your MyMedicare account.

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