Byron Moore, CFP® and Mike Jones

Care giving for the elderly

By Byron Moore, posted July 31, 2017
Originally published in the News Star and the Shreveport Times on Sunday, July 30, 2017.
 

elder care_sm.jpgQ:  My husband and I are still relatively healthy, but we’ve told each other we don’t want to spend any of our days in a nursing home. It seems like it would be cheaper to just care for one another at home. Is that right? Which costs more – getting care at home or care in a nursing home?

A: That depends on whether you are counting just dollars, or whether time, energy and health are among the costs you are considering.

These days in Louisiana you’re looking at $4,000 to $5,000 per month for a semi-private room in a nursing home. That’s a basic cost with plenty of add-on costs possible.

If you receive care at home, the costs need to be counted in more than just dollars.

The average caregiver is a married 49-year old female who is employed. One out of four is of the millennial generation. That tells me that care is given not only by spouses, but also by adult children caring for one or more elderly parents.

That average 49-year old female’s parents may not be writing checks each month to a nursing home facility, put she is paying a significant cost in reduced work hours (and pay), missed promotions, time off from work and even quitting or retiring early. One estimate I read put this cost at over $300,000 for the “free” unpaid family member providing care. And those are just the financial costs.

There are also time costs. The average caregiver spends 24 hours per week in that role. It’s the job you have waiting for you when you get off work. A popular book on the topic is entitled The 36 Hour Day.

And then there are the costs in energy and health. The physical toll exacted on the caregiver, coupled with the emotional stress, can lead to increased health problems and even premature death.

If you reach the point where you (or your children) can no longer be the exclusive caregivers, you’ll have to pay a non-family member to offer care. How much will that cost? That depends on how much care is needed.

If you want a paid caregiver to be in your home 40 hours per week, you’ll pay on average about $30,000 per year in costs. If you need someone every day for twelve hours, you’ll pay about $60,000 per year. And if you need assistance 24/7/365, you’re looking at a cost of about $120,000 per year.

Kind of makes the nursing home options look cheap, right?

No one can predict the future, but we can do our best to prepare for it.

Physical preparation. There are no guarantees, but you can at least tilt the odds in your favor. Begin by taking stock of your physical health and doing everything practically possible to maximize your health. A great deal of financial damage is done as a result of physical neglect. Working with your health professional, make a plan of diet, exercise and sleep that will serve you well in your later years.

Financial preparation. If you or your spouse do ever need long-term care (whether in an institution or at home), how will you pay for it?

If you answer is, “we’ll have to pay for it out of our own pocket,” you’re telling me you are willing to incur the maximum possible expense and cost to your estate.

Why not investigate opportunities to spread that risk (and cost) around with long-term care insurance? These days plans are available the traditional way, through the payment of a premium.

But plans are also available via asset-based products. These plans involve repositioning some assets, housing them at insurance companies. Some plans simply reimburse costs you incur in obtaining long-term care. Others may actually pay a cash amount, regardless of cost you incur. This would come in very handy in the case of a family member providing care “for free.”

Any form of long-term care is expensive. Some costs can be measured financially. Most cannot.

But any of the cost you may face—whether financial, time, energy or health—are best dealt with advanced preparation, not wishful thinking.

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