Financial Preparation For Eldercare: Three Things You Need To Know Now

No matter what your age, it’s never too early to start discussing options for the legal, financial, and practical decisions that come along with eldercare.  Preparing in advance is much easier, preferably while you or your loved one can still participate fully.

However, regardless of whether there’s a need now or you are planning ahead, it’s important to do your research and find a financial planner and an attorney who understands the laws and regulations, both federal and state, that affect elderly persons. It is best to choose a Certified Financial Planner-Personal Financial Specialist (CFP-PFS) which is the most significant credential, Certified Public Accountant (CPA)  or a Chartered Financial Consultant (ChFC)

Here are three key things to do when searching for the right professionals to suit your needs

1. Get referrals and check backgrounds with the CFP board or other relevant professional organization. Anyone can call themselves a financial planner without being licensed. Again, it is best to choose a CFP who must commit to continuing education on financial planning and ethics.
2. Interview candidates and ask if they’re fee-based versus portfolio percentage based, how long they have been in practice and what credentials they hold.
3. Make a decision based on what your needs are as well as choosing someone you are confident is professional and will be able to handle your information and questions in a timely manner not only today, but also years down the road.

Once you’ve found the right candidate for your needs, the three most important tasks and questions for your parents/ or you and your spouse will be:

1. Assess your overall financial picture.
   
   You have worked hard all your life to save for retirement, so it’s smart to think about how you plan to pay for all the potential expenses that might incur as well.
   

• Start with creating a worksheet of expenses to get an idea of how much income you’ll need in retirement. Things like mortgage or rent, utilities and phone, food, clothing, entertainment (including dining out) transportation, insurance premiums and other regular expenses.
• Write down other expenses, such as travel, out-of-pocket medical expenses, home repairs and other items.
• Figure what your income will be. What you’ll receive from social security, retirement, wages, investments and other sources.
• Keep in mind inflation and also that your expenses in retirement may be quite different from current expenses since your habits and routines are likely to change, your financial planner can help you to gauge inflation.
• Is there anything you need to be doing or know about now, such as tax laws, to be better prepared later?

2. Are you prepared to pay for care? What are your options?
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   With an uncertain future for Medicare, you should have a Plan B in case these expenses will need to come out of pocket.

• Find out what long-term care costs are where you live.

• Research the types of long-term care coverage available, what’s covered and what’s not so you know what all your options are. Medicare coverage may not pay for many of the long-term care services that people often need, so it’s a good idea to know what’s covered and what’s not now.

• Find out what public programs you are eligible for, what they cover, what private financing options are available, and which ones work best for you.

3. Is your will and trust (if applicable) up to date and reflective of your wishes?

• What are your preferences for medical treatment should you become seriously ill using advance directives? Particularly if you have a chronic illness, look at disease specific situations that occur and include those in the directive.

• Identify and document who will manage your affairs if you cannot. Discuss this with your attorney and your loved ones.

• Discuss and document your preferences. Be sure to organize and collect important documents in one location and create copies of everything and keep them in a separate location. Let your loved ones know where they can find them.

It’s a good idea to establish you and your spouse’s – or your parent’s – wishes now to ensure that they’ll be taken into account should you become unable to express yourself in the future.