Talk openly with family members
Use these four questions as a guide when you bring family members together to discuss how your parents or other aging family members want to be taken care of. Do it before anyone needs help, so that you can make thoughtful decisions, says Ben Storey, director, Retirement Research & Insights, Bank of America. Strongly encourage your parents to get a will and power of attorney if they don’t already have one, as well as a healthcare proxy to spell out who will make key financial and medical decisions if they can no longer do so themselves.
“And don’t assume both parents have the same idea,” says Storey. “Hear everyone out and try to find common ground.” In addition to the legal documents, he suggests setting down in writing everyone’s shared responsibilities — especially who’s on board to provide financial and physical care. Include a contingency plan in case the designated caregiver isn’t able to assume — or has to leave — the role.
Set savings goals and stick to them
“When you’re focused on immediate financial needs, like caring for your parents, you can end up diverting funding from your future,” Storey notes. To help avoid that risk, Mejía recommends setting up two separate portfolios — one for your own retirement, one for your parents’.
While both are critical, your own retirement should be considered the more important, he says. “If that means contributions to elder care funding are modest at first, that’s okay. You can attach different risk levels to the two portfolios, based on when you’ll need the money.” For instance, you might consider an investment strategy that’s a little more aggressive for the assets you set aside for your parents, he says.
Consider long-term housing needs
“Many Hispanic/Latino families prefer having elderly parents move in with them rather than entering a care facility. That can require a bigger house,” Storey notes, or elder-friendly renovations to an existing home, such as updating lighting, adding grab rails or creating a first-floor bedroom to limit the need to use stairs. He suggests asking yourself, “Will you able to renovate or purchase a larger home down the road?” Your advisor can help you prepare for the costs, he adds.