Nine Tips on Caring for Your Aging Parents + 2 Things to Avoid

It has to happen, sooner or later. Talking to your parents about their financial future and long-term care is a conversation that’s never easy, but must be taken care of. Waiting until one of your parents is lying in a hospital bed is not the time to figure these things out.
Personal finance expert Eric Tyson says if you, like an increasing number of Baby Boomers, are caring for aging parents, it’s important to start the planning early to make the transition as easy as possible for you and your folks.

Tyson’s new book Personal Finance for Seniors for Dummies® (Wiley, May 2010, ISBN: 978-0-470-54876-9, $21.99), co-authored with Bob Carlson, offers these nine tips for the care of your elderly parents, one must have and two things you can probably forget:
Leverage others’ experiences. If you find yourself in the situation of having to care for elderly parents, the good news is that you can take comfort from shared experiences. You can know that millions of others are dealing with or have dealt with similar issues. If you begin feeling a bit overwhelmed, take a deep breath, and then take a few moments to get to know others who are sharing your challenges.
“How can you find these folks?” asks Tyson. “Well, one terrific starting point is to contact outreach coordinators or social workers at local senior centers. For example, suppose you have a parent suffering from Alzheimer’s disease or other dementia. You can join a support group that focuses on that issue. The local senior center may run such groups or may be able to refer you to them. Also, talk to others you know. You may be surprised by how many friends and family members have been down the same road and are caring for elderly parents.”
Ask for professional help. Don’t try to do everything yourself. Tap social services agencies. For example, check out the National Association of Professional Geriatric Care Managers or the Administration on Aging. “You can find plenty of programs at all levels of government, but they are rarely advertised,” says Tyson. “Digging a little can provide helpful resources you may not otherwise have found.”
Invest in their health. Be proactive about assessing your parents’ health situation and what can be done to make the most of it. “Encourage your parents to be proactive about managing their own health rather than reacting after a problem is uncovered,” advises Tyson. “That said, remember to be sensitive to their privacy and their own desires. Focus on your concern that their health be the best that it can be. Avoid taking control of their healthcare decisions, unless they’re truly incapable of doing so themselves.”
Get your parents’ affairs in order. Most people could think of 100 things, perhaps even 1,000 things, they’d rather do than get their affairs in order for their passing. Contemplating one’s mortality usually isn’t an enjoyable activity, especially if you’re in good health.
“When encouraging your parents to get their affairs in order, be careful not to let your best intentions be misinterpreted by your folks or other family members,” says Tyson. “For example, perhaps your parents have neglected to complete a will and an estate plan. Although you may not have the slightest selfish interest in inheriting some of their money and assets, other family members may have a different take on your intentions when you encourage them to complete an estate plan. Be sensitive to their feelings and privacy regarding their finances and what happens with their estate upon their passing.”
Examine housing and medical care options. As your parents age (and, ultimately, as you age), be careful not to quickly leap to conclusions as to what type of housing and medical care is best for the situation. Although your decisions may be based on years or even decades of prior observations and thinking, there’s no substitute for casting a wide net and considering an array of options and their pros and cons.
“Reading this book is an excellent starting point,” says Tyson. “You can also supplement our information and get more detailed, on-the-ground, local flavor by speaking with a range of medical professionals and other folks who regularly work with the elderly.”
Use caregiver agreements. In many families, younger members help care for older members for at least a brief period. Families should pay attention to the details and rules regarding this care partly to ensure they receive maximum benefits and partly so each member will feel he or she is treated fairly.
“When a family member is a personal caregiver for another, you should create a written caregiver agreement,” advises Tyson. “The agreement, which should be discussed with all involved parties, ensures that everyone in the family knows the terms and has no misunderstandings and that tax benefits are maximized.
“Remember, when a family member cares for another and is being financially compensated, the payments aren’t tax-free gifts. The written agreement helps stop the IRS from considering the transfers gifts. This is important because gifts above the annual exclusion amount–$13,000 in 2010–are taxable or reduce the lifetime gift and estate tax credit of the parent receiving care. Any payments are compensation for services and must be included in the gross income of the recipient. This is true whether the payments are made periodically like a salary, in a lump sum, or as an additional inheritance.”
Separate living spaces if parents are moving in. Some people choose to have a parent come to live with them. In the best cases, this works well and enables more frequent contact for shorter periods of time. Grandparents can see their grandkids and help care for them occasionally. In the worst cases, however, spouses end up at odds over the lack of boundaries and the interruption of family time by the care needs of an elderly relative.
“Moving a parent into your own home is a big decision that all parties should thoroughly discuss,” notes Tyson. “At a minimum, we recommend that you have available separate living space, with a separate entrance and privacy, to help make this work.”
Take care of your family. Between work and other commitments, you may feel overwhelmed when caring for your elderly parents. But do remember to take care of your immediate family (spouse and dependent children). Neglecting a spouse may happen easily because you may feel that he or she doesn’t really need your assistance the way a frail parent does or the way a young child does. But, your spouse still needs and deserves your love and affection even though he or she likely doesn’t need your support for daily living.
“Of course, there will be times, such as a hospitalization, when your elderly parents need more of your help and attention,” says Tyson. “Most families expect and understand this. Your own family should be understanding of short-term absences and periods when you have less free time for them.”
Take care of yourself. As you care for all your loved ones, don’t neglect yourself. The best givers often tend to really neglect their own needs and their own health. “Think back to the last time you were traveling by plane and the flight attendant advised putting on your own oxygen mask before assisting others,” says Tyson. “This advice makes sense because you’ll be better able to help others when you’re stronger, and it certainly applies to caring for aging parents.”
Starting the conversation about any of this is difficult. Tyson tells Family First “look for the right time and opening. Don’t bring (these things) up when you are frustrated. Wait for a calm moment.” As Tyson says above, you don’t want to appear to be looking for money or have some sort of ulterior motive. So he said to approach it like “here’s what we’re doing; how about you all?” so you can ask questions about their situation, while offering your chosen solution.
Tyson suggests saying something like “Can you explain to me about…” a certain subject. He says to be mindful of what your parents are thinking because they may not understand why you are asking so be sure to explain your intent and motivations clearly.
One Must Have
One item Tyson highly recommends you make sure your parents have is a will. While life does go on if there isn’t one at a parent’s death, the state laws kick in and your parent’s desires may not be what the law dictates, he explains. Having a will is a way to ensure your parent’s wishes are carried out.
Two Things to Forget
Two items Tyson says to be wary of are annuities and long-term care insurance. He points out that everyone’s situation is different so he’s not discounting either of these.
With annuities, a minority of people can benefit from these, he says, and a lot of sales are driven by commissions for the sales person, not focused on the benefit of the investor.
With long term care insurance, he says most people don’t really need it because state Medicaid kicks in for those who don’t have means and for those who are affluent, they can take care of themselves.
Specifically related to finances, Tyson says to have your parents review their investments 1-2 times per year and diversify their portfolio worldwide. The book details many ways to prepare for your financial future as well as your parents, including a calculator to understand spending habits and what to expect your spending will be in retirement. Check out Personal Finance for Seniors for Dummies® for tons of detailed information for you and your parents. It will make the inevitable conversation much easier to have, sooner rather than later.
About the Authors:
Eric Tyson is an internationally acclaimed and bestselling personal finance book author, syndicated columnist, and speaker. He has worked with and taught people from all financial situations, so he knows the financial concerns and questions of real folks just like you. Despite being handicapped by an MBA from the Stanford Graduate School of Business and a BS in Economics and Biology from Yale University, Eric remains a master of “keeping it simple.”
After toiling away for a number of years as a management consultant to Fortune 500 financial-service firms, Eric took his inside knowledge of the banking, investment, and insurance industries and committed himself to making personal financial management accessible to all.
Today, Eric is an accomplished personal finance writer. His “Investor’s Guide” syndicated column, distributed by King Features, is read by millions nationally. He is the author of five national bestselling books, including Personal Finance For Dummies, Investing For Dummies, and Home Buying For Dummies (coauthor), among others, which are all published by Wiley Publishing. Personal Finance For Dummies was awarded the Benjamin Franklin Award for best business book of the year.
Eric’s work has been featured and quoted in hundreds of publications, including Newsweek, The Wall Street Journal, Los Angeles Times, Chicago Tribune, Forbes magazine, Kiplinger’s Personal Finance magazine, Parenting magazine, Money magazine, Family Money magazine, and Bottom Line/Personal magazine; on NBC’s Today Show, ABC, CNBC, PBS’s Nightly Business Report, CNN, and FOX-TV; and on CBS national radio, NPR’s Sound Money, Bloomberg Business Radio, and Business Radio Network.
Eric’s website is www.erictyson.com.
Bob Carlson is editor of the monthly newsletter Retirement Watch. Bob also is Chairman of the Board of Trustees of the Fairfax County Employees’ Retirement System, which has over $2.4 billion in assets. He has served on the board since 1992. He was a member of the Board of Trustees of the Virginia Retirement System, which oversaw $42 billion in assets, from 2001 to 2005.
His prior books include Invest Like a Fox…Not Like a Hedgehog and The Rules of Retirement, both published by Wiley Publishing. He has written numerous other books and reports, including Tax Wise Money Strategies and Retirement Tax Guide. He also has been interviewed by or quoted in numerous publications, including The Wall Street Journal, Reader’s Digest, Barron’s, AARP Bulletin, Money magazine, Worth magazine, Kiplinger’s Personal Finance magazine, Washington Post, and many others. He has appeared on national television and on a number of radio programs. He is past editor of Tax Wise Money. The Washington Post calls Bob’s advice “smart…savvy…sensible…valuable and imaginative.”
You also can hear Bob as a featured guest on nationally syndicated radio shows such as The Retirement Hour, Dateline Washington, Family News in Focus, The Michael Reagan Show, Money Matters, and The Stock Doctor.

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