10/8/2018
The latest episode of the "They Don't Teach You This Podcast" is brought to you by oXYGen Financial, serving the X & Y Generation and millennials since 2008. oXYGen provides financial planning and investment advice and allows you, the listener, to book a consultation with Tyler or Kurt for FREE with no obligation to move forward. Just go to www.oxygenfinancial.net today to get your own personal financial advice!
Follow us on Twitter
@tdtpod - Podcast Twitter account
@TylerHuck - Host
@KurtDBrucker - Co-Host
@AllieKayeSays - Co-Host
Follow us on Facebook
They Don't Teach You This Podcast
In this episode we chat about talking with your parents about legacy planning and their finances. Not an easy topic to discuss!
- Newsroom Nye
- https://www.wsj.com/articles/companies-lure-new-workers-with-college-coaching-student-debt-repayment-1538568001?mod=hp_lead_pos3
- https://www.bloomberg.com/news/articles/2018-10-01/millenials-love-luxury-and-their-spending-on-gucci-shows-it?cmpid=socialflow-twitter-business&utm_source=twitter&utm_content=business&utm_medium=social&utm_campaign=socialflow-organic
Preparing for limited mental capacity:
- Get wills, medical directives, etc in place
- Discuss options and what your parents would want in the event you need to make a medical decision for them or they aren’t able to make decisions for themselves
7 tips for talking to your aging parents about money
1: Identify and process your feelings before inviting your parent to talk
Talking to parents about their estate plans, financial situation, and healthcare wishes is emotional business. Before you invite them to discuss these matters, take time to process your own feelings. You may be annoyed, angry, frustrated, sad, or scared about their situation. Whatever your emotional state, know that it is normal and healthy to have a reaction to your parents aging. By processing these feelings up front, you are more likely to be calm during the actual dialogue.
2: Extend a loving invitation
Lead with loving intentions and let your parents know that you want to discuss their financial life because you care. Begin by saying something like, “I know this might be difficult for you to talk about, but I care enough about you to want to make sure you’re taken care of as you age. Can we find a time to discuss what plans you have made and how I might be able to help you in making sure everything is taken care of?” Remember you have been thinking about this conversation for a while, but this may be the first time your parent has considered this discussion. They may need a little time to process your request.
3: Ask during a quiet time
Finding a quiet time to ask your parents to engage in a financial dialogue with you is essential. Be certain to avoid busy holiday times or events where you are likely to be distracted. While you may want to talk today about money, remember your parent may need some time to adjust to the idea of breaking their money silence with you. Depending on your personality, waiting for a quiet time to invite them to engage in a money talk may be challenging. In this situation, patience does pay off.
4: Be specific about your concerns
When sharing your concerns with a parent, be specific. If you are worried that your mother has been the victim of a telephone scam, let her know that. Express your concern and ask permission to help. For example, say, “I am worried that you may have been taken advantage of financially. I would like to help you not get hurt like this again in the future. What do you think?” If you express loving concern and are specific about the cause of your worry, your parent is more likely to understand your actions and comply with your request.
5: Keep the conversations brief
Once your parent has agreed to a money talk, keep the conversation brief. You may have a million questions for Mom or Dad, but asking one or two questions at a time is better than bombarding your parent with inquires. While you may have been thinking about this money talk for months leading up to it, this is a new conversation for your parent. Give them time to digest what you are saying and respond. It is better to have three 30-minute talks than one 90-minute conversation. Not only does this keep everyone focused on one task or discussion item at a time, it helps everyone stay calm and rational.
6: Give your parent control whenever possible
A big part of aging is dealing with a loss of control over your physical and mental health. Elderly parents know that in time they will need more support, but they often don’t want to face this reality. When discussing how you can help them with financial matters, reassure them that this is not an attempt to take over their life, simply an offer to help them as they age. Whenever possible, invite your parent to decide what to address and when. By doing so, you are demonstrating that you are there to support them, not to take over.
7: Progress, not perfection
Talking about money with an aging parent is not a one-time event. It is a journey that requires time, energy, and a healthy dose of patience. Breaking money silence may be a new skill and with any new skill it takes time and practice. The goal is not to be perfect when discussing these emotional laden topics with your parents. It is to make progress one conversation at a time.
Use these tips to help you begin a financial dialogue with your aging parents. You may be surprised by their response. They may just say, “I am glad you finally asked.”
Spooky Story:
Rick and Jan were 2 prominent parents in their city with 3 children and had built up a lifetime of assets and various investments. However, they were very close to vest and the 3 children Ron, Jackie, and Billy never talked with their parents about the money they had and how that would be divided. On top of that there was a snag in getting the wills set up and the various properties they had. So the 3 children were left at odds when there was a terrible car wreck that killed their parents with no will in place. This left them at odds and the siblings were never the same again. The moral of the story is to be sure you talk to your parents about money. You never know if they have things set up properly and could save the family by getting to the bottom of the imminent plans in the event of something happening to them.
Long Term Care:
Long-term care is a range of services and supports you may need to meet your personal care needs. Most long-term care is not medical care, but rather assistance with the basic personal tasks of everyday life, sometimes called Activities of Daily Living (ADLs), such as:
- Bathing
- Dressing
- Using the toilet
- Transferring (to or from bed or chair)
- Caring for incontinence
- Eating
The duration and level of long-term care will vary from person to person and often change over time. Here are some statistics (all are “on average”) you should consider:
- Someone turning age 65 today has almost a 70% chance of needing some type of long-term care services and supports in their remaining years
- Women need care longer (3.7 years) than men (2.2 years)
- One-third of today’s 65 year-olds may never need long-term care support, but 20 percent will need it for longer than 5 years
The facts may surprise you. Consumer surveys reveal common misunderstandings about which public programs pay for long-term care services. It is important to clearly understand what is and isn’t covered.
Medicare: - Only pays for long-term care if you require skilled services or rehabilitative care:
-
- In a nursing home for a maximum of 100 days, however, the average Medicare covered stay is much shorter (22 days).
- At home if you are also receiving skilled home health or other skilled in-home services. Generally, long-term care services are provided only for a short period of time.
- Does not pay for non-skilled assistance with Activities of Daily Living (ADL), which make up the majority of long-term care services
- You will have to pay for long-term care services that are not covered by a public or private insurance program
Medicaid: - Does pay for the largest share of long-term care services, but to qualify, your income must be below a certain level and you must meet minimum state eligibility requirements
- Such requirements are based on the amount of assistance you need with ADL
- Other federal programs such as the Older Americans Act and the Department of Veterans Affairs pay for long-term care services, but only for specific populations and in certain circumstances
Health Insurance: - Most employer-sponsored or private health insurance, including health insurance plans, cover only the same kinds of limited services as Medicare
- If they do cover long-term care, it is typically only for skilled, short-term, medically necessary care
There are an increasing number of private payment options including:
- Long-term care insurance
- Reverse mortgages
- Life insurance options
- Annuities
Cost of care:
Below are some national average costs for long-term care in the United States (in 2016). Average costs for specific states are also available.
- $225 a day or $6,844 per month for a semi-private room in a nursing home
- $253 a day or $7,698 per month for a private room in a nursing home
- $119 a day or $3,628 per month for care in an assisted living facility (for a one-bedroom unit)
- $20.50 an hour for a health aide
- $20 an hour for homemaker services
- $68 per day for services in an adult day health care center
The cost of long-term care depends on the type and duration of care you need, the provider you use, and where you live. Costs can be affected by certain factors, such as:
- Time of day. Home health and home care services, provided in two-to-four-hour blocks of time referred to as “visits,” are generally more expensive in the evening, on weekends, and on holidays
- Extra charges for services provided beyond the basic room, food and housekeeping charges at facilities, although some may have “all inclusive” fees.
- Variable rates in some community programs, such as adult day service, are provided at a per-day rate, but can be more based on extra events and activities
Financially Caring For MOM and DAD
Four Money Questions To Ask Your Parents
- Open the conversation by sharing something you just did (i.e.- you just did a will, you just did a financial plan, etc. and it made you wonder…..)
Is Your Financial Plan O.K.?
- You need to find out if you’ll have to take care of Mom and Dad- so you have to delicately talk about them running out of money.
- Do they have enough current income?
- Are they still paying a mortgage or carrying debt?
Do You Have A Will? (remember Aretha Franklin-timing is good)
- Focus On Getting It Done Vs. What Is Being Left To Me/Us
- Important To Know If They Have A Power Of Attorney
- Do They Have A Living Will Or An Advanced Medical Directive
Do You Have Long-Term Care Insurance
- The average cost for assisted living is $3,628 a month
- The average cost private room nursing home cost is more than $7,000 a month
- Do you parents plan to pay out of their pocket, do they have insurance, or are they expecting you will take care of them?
Where Is Everything? ….The What If Questions
- Where do you have all of your documents?
- Who is on your team? (CPA, Atty, Financial Advisor?)
- Do you need my help right now? (issues like paying bills, driving, etc. can all become issues you need to be worried about)
Yeah- you might ask questions like
- Can my parents afford to retire
- What happens if your siblings all don’t live in the same place
- Are they going to help you with a down payment on a house or kids college
---
As usual, don't hesitate to tweet us or message us on Facebook with questions, comments, or feedback.
You can subscribe to the podcast anywhere you find your podcasts.
Please rate and review us on iTunes!
We hope you are already breathing easier about life!
