A new survey is shedding light on the need for increased education around financial planning for senior care in retirement for both Americans approaching retirement age and their adult children caregivers.
A Place for Mom, a senior living referral service, and The Mutual Fund Store, a registered investment advisers, commissioned the survey which was conducted online in April by Harris Poll and released in May. The survey found that over one quarter (28 percent) of Americans whose parents are living believe they will need to, or already do, support their parents financially in their senior years. Additionally, 86 percent of that demographic have concerns about their capacity or ability to do so.
“Through our work with families, we find that it’s quite common for adult children to provide financially for their aging parents, but it’s not often clear if families had expected or planned to do so,” said Ed Nevraumont, CMO of A Place for Mom. “The goal of this survey was to explore Americans’ knowledge of their retirement benefits, gauge their concern around supporting their parents financially as they age, and help underscore the importance of families starting a conversation around senior care.”
Families can avoid planning mistakes by understanding and discussing all of the costs associated, not only with retirement, but with long-term senior care. However, A Place for Mom and The Mutual Fund Store’s survey found that 42 percent of Americans have not discussed anything with their parent(s) regarding how they will be cared for in their senior years. Even further, 27 percent of those who believe they will need to help support their parent(s) financially as they age admit that they have not discussed anything regarding their parents’ care in their senior years.
“At every stage in life, it is essential to remember the importance of financial planning as a means to a secure future during and after one’s career,” said Andy Smith, executive vice president of Investments at The Mutual Fund Store. “This survey shows that too many families are not discussing financial planning with aging loved ones. It’s an important reminder for families to start voicing concerns about retirement finances as well as to make senior care a priority for themselves and for loved ones.”
To help families take the first steps into planning for retirement and senior care expenses, Nevraumont and Smith offer the following guidance:
· Start gathering and organizing important financial and legal documents so family members know where to find these in an emergency
· Utilize the help of a Senior Living Advisor to understand the wide variety of care and living options available today based on your specific situation and budget
· Utilize the help of a financial advisor to understand the different investment vehicles available to prepare for retirement and senior care
· Map out a budget for senior care using sources of available income — don’t forget to look into veteran benefits, long-term care insurance your parents might have, 401(k)s and other investments. If you are relying on government assistance, educate yourself on the differences between Medicare and Medicaid, and what is covered.