You may have heard about the financial crisis facing the millennial generation, or today’s 30- and 40-year-olds. They’re lagging far behind their parents’ generation in accumulating wealth – in fact, they have ten times less in savings on average. That gap is a large reason why millennials struggle to pay down debt, buy a home, or start a family.
Their precarious financial situation makes it particularly hard for millennials to support their own parents as they age. Elder care in the U.S. is only growing more expensive, and with less savings than previous generations, millennials are struggling to finance one of their most meaningful and important roles: providing long-term care for their loved ones.
Arbor’s “Generational Wealth Series” is designed to help you take control of your future by learning more about the biggest financial milestones in life. This fourth installment covers an issue many millennials have already begun to face: caring for aging parents.
Caring for Parents
Many children believe it’s their responsibility to help their parents remain comfortable and safe through old age. But elder care is extremely expensive – and the cost is only rising. Across the country, a private room in a nursing home facility costs an average of $290/day. And in the past year alone, the cost of in-home aides rose over 4%. While we all hope our parents will stay healthy into old age, the need for long-term care in the U.S. is growing. In fact, the Department of Health and Human Services now estimates that 7 in 10 seniors over 65 will need some type of long-term care.
Some millennials are opting for a less expensive option: moving their parents into their own home. But between work and family, this can be draining. Whatever type of care you and your parents have decided is right, there are ways to save up so you can live the life you want and keep your parents safe.
Planning for Elder Care
The key to preparing for the expenses of long-term care is active planning and a sound strategy: saving early and saving often. A trusted Financial Advisor can help you build an investment plan tailored to your unique situation and needs, so you can grow your nest egg efficiently and have enough in savings to provide your parents with comfortable care.
An active investment strategy is important, because Medicare won’t cover all the costs of elder care. While Medicare will pay hospital bills for many seniors, the program does not cover non-medical long-term care, like support with moving, eating, or bathing. A trusted Financial Advisor can help you explore other assistance programs, like the PACE program, which may help cover long-term care costs for your parents.
What About Me?
Thinking about long-term care for aging parents often begs the question: What happens to me when I age? With the costs of elder care only rising, no parent wants to burden their child with financing their long-term care.
A good Financial Advisor will help you invest, save, and budget for a comfortable retirement and the potential costs of your own care. Planning and preparing early is key. In Arbor’s final installment of the “Generational Wealth Series”, we’ll cover retirement: how to ensure you can live the life you want to live, stress less during retirement, and pass down wealth to your own family.