Once upon a time, we all visited Grandma and Grandpa at the family homestead, and the siblings and their own children would pitch in to help care for them and their home. Times have changed, and now it’s more likely that Grandma and Grandpa live in a modern condo.
A reporter shared his personal story about his parents, who are in the early stage of retirement and have wisely decided to leave their old five-bedroom, single-family home behind to move into a smaller two-bedroom home as part of their retirement plan. In the Chicago Tribune article, “Don't want to burden your children? Plan now,” he candidly shared that the old place was in need of a lot of work. Now his parents live in a smaller new home in a neighborhood where they can walk to everything instead of needing to drive. Even better, friends and family live close enough to continue their relationships. Sounds perfect – yet it wasn’t an easy transition.
Downsizing is emotionally and logistically difficult. It is wise to do so while you are young, healthy retirees. In more traditional times, older folks would be cared for until the end of their lives by children and extended family. However, times have changed.
Part of this changing perspective is from "the triple-decker sandwich," where baby boomers are facing retirement themselves and have to also care for their elderly parents—plus manage relationships with their own children.
The number of Americans needing long-term care is expected to double in the next 30 years, and a recent study of Medicare patients found that out-of-pocket costs at the end of life were highest for patients with dementia. These people require help with daily living, often for years—most of whom aren’t covered by public programs.
Here are some ideas on how to address this issue:
Downsizing. If you're in a large, expensive home in a car-dependent neighborhood, downsizing now lets you limit expenses while maintaining independence longer. Proximity to family and friends is also very important. Even though 89% of respondents in the survey said they'd wanted to stay in their current home, they still found the option of a smaller home to be much more preferable to a nursing home or assisted living.
Invest in long-term care insurance. If you want to be cared for in your home, find an insurance policy that covers that type of care as part of your retirement planning. The younger and healthier you are, the cheaper these policies are going to be.
Bring the entire family to meet with an estate planning attorney. There are discussions you’ll need to have about passing wealth down through the generations, inheritances and estate planning. An experienced elder law or estate planning attorney at Cottrell and Jacobs PLC will be able to help the family.
Reference: The Chicago Tribune (November 14, 2015) “Don't want to burden your children? Plan now”