Will You Need to Help Pay Your Parents’ Long-Term Care Expenses?

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As the average lifespan for Americans continues to increase, a growing number of middle-aged individuals and couples are facing a financial challenge many haven’t planned for: helping support their aging parents.

Unfortunately, the cost of long-term care isn’t something that all retirees have factored into their budgets. These costs can put a significant dent in even a healthy retirement nest egg — which can leave adult children with the financial responsibility of paying for their parents’ care.

Sobering Stats

More than seven out of 10 Americans who are currently 65 years of age or over will need long-term care services before they die, according to the U.S. Department of Health and Human Services. And any American alive today who turns 65 will have a 40 percent chance of entering a nursing home.

According to the most recent Genworth Cost of Care Survey, which has been conducted annually since 2004 to help families plan for paying long-term care expenses, the average monthly cost of a wide range of different long-term care services ranges from around $1,500 to more than $8,000.

Here are the national median costs for some of the most common long-term care services used by seniors today:

  • Adult day healthcare — $1,517
  • Assisted living — $3,750
  • Homemaker services — $3,994
  • Home health aide — $4,099
  • Nursing home (semi-private room) — $7,148
  • Nursing room (private room) — $8,121

To put these numbers in perspective: If just one parent has to live in a nursing home, this will cost an average of up to $97,000 a year, or about $195,000 a year if both parents live in a nursing home. And remember: These are national averages. In some areas of the country, these costs can be significantly more — as much as two or even three times higher than these averages.

Talk Openly and Honestly

If you have parents who are at or near the age when they might need long-term care, it might be wise to have a serious discussion with them about how care will be paid for. While initiating these conversations can be difficult, doing so is the best way to help protect both your parents’ and your own long-term financial future.

Here are a few things you should consider talking about during this conversation:

  1. Your parents’ financial assets — If there’s a chance that you might one day be responsible for helping pay for your parent’s long-term care costs, then it’s probably reasonable for you to ask detailed questions about their finances. This will help give you a good idea of how much money your parents have (or don’t have) that can be used to help pay for these expenses.
  2. Your ability (realistically) to help pay for their care — Once you have an idea of how much money your parents can put toward their long-term care expenses, you can determine whether or not you and your spouse can help cover the difference (if any). Also talk to other siblings and family members to determine if they are able to help out with these costs.
  3. The potential cost of long-term care — The Genworth Cost of Care Survey includes detailed long-term care costs like those listed above broken down by 440 different regions. You can use this data as a starting point for estimating what the potential costs of long-term care might be for your parents.
  4. The feasibility of buying long-term care insurance — Many people purchase long-term care insurance policies that pay a portion of the costs associated with long-term care. The cost of these policies varies widely depending on the benefits a policy offers, such as an automatic inflation adjustment or a shorter waiting period before benefit payments begin, and the age of the insured.

Now is usually the best time to have this conversation — not after your parents are in need of long-term care. This will help both you and your parents plan proactively for the financial impact that long-term care could have on both of your finances.

Please contact us if you have more questions about helping pay long-term care costs for your parents.


The commentary is limited to the dissemination of general information pertaining to Frontier Wealth Management, LLC's ("Frontier") investment advisory services. This information should not be used or construed as an offer to sell, a solicitation of an offer to buy or a recommendation for any security, market sector or investment strategy. There is no guarantee that the information supplied is accurate or complete. Frontier is not responsible for any errors or omissions, and provides no warranties with regards to the results obtained from the use of the information. Nothing in this document is intended to provide any legal, accounting or tax advice and Frontier does not provide such advice. This information is subject to change without notice and should not be construed as a recommendation or investment advice. You should consult an attorney, accountant or tax professional regarding your specific legal or tax situation.

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