Parents and kids both grow old, like it or not. Eventually, we swap roles. It can be a muddy transition, tangled with emotions and money stress.
About a fifth of middle-aged Americans gave financial support to a parent 65 or older in 2012, the Pew Research Center found. Inviting Mom and Dad to live with you might help cut some of the costs and make caregiving simpler. “It’s easier to care for an elderly mom or dad in a nearby room, rather than one who’s across town or even in another state,” says AARP.
But sharing a home with older parents is not for everyone. Here are some financial impacts to think over when you’re making the decision:
1. What’s the cost of long-distance caregiving?
Caring for someone who lives far away is expensive. Long-distance caregivers have higher expenses, an AARP Policy Institute study says. The cost of travel is one of them. When a crisis happens, as it surely will, the costs of last-minute travel are even steeper.
Missed work and the stress of managing care from far away are just two more downsides.
2. What’s the cost of having them at your place?
If you’re counting only financial costs, bringing your parents into your home may be the cheapest solution. But that depends on variables such as remodeling, the cost of home care if they stay put, and the price of local nursing homes.
In 2009, Americans provided their elders and other adults with $450 billion worth of unpaid care, with an average hourly value of $11.16, according to the AARP Public Policy Institute’s 2011 report on the economic value of family caregiving. (The median hourly wage of a home health aide is $10.10, the Bureau of Labor Statistics says.) If your parents lived with you, would you have to cut back on work hours to help take care of them?
The news isn’t all bad. You may be able to deduct certain expenses, such as crutches, hearing aids and mileage for driving your parent to the doctor. But here’s the tough part: In order to be deductible, the unreimbursed medical expenses must be more than 10 percent of your adjusted gross income (7.5 percent if either you or your spouse was born before Jan. 2, 1949). See the rules at AgingCare.com
You can also claim your parent (or any relative) as a dependent if you pay more than half of their financial support and their income is limited. AgingCare.com explains the details. Dependents are worth a $3,950 exemption (basically a deduction) in tax year 2014. That will grow to $4,000 in 2015. Be aware, however, these phase out for high-income taxpayers.
Long-term-care insurance, if your parents had the foresight to buy it, could make your decisions easier and lighten the financial load for everyone.
3. What are the alternatives?
The alternatives are in-home care, adult day health programs, assisted living and nursing homes. Look up and compare costs with this interactive map from Genworth, which sells long-term-care insurance.
The average cost per day for a private room in a nursing home is $240 nationally, according to Genworth’s 2014 Cost of Care survey.
4. Would home health care work?
Home health care includes lots of services that help older people live independently. You hire a company or an individual to help with cleaning, cooking, laundry and personal care. You can also hire specialized help, such as licensed nurses or massage therapists.
You or your parent may have to shoulder the cost out-of-pocket, but do see if help is available from other sources. The U.S. Department of Health and Human Services says:
Home care services can be paid for directly by the patient and his or her family members, or through a variety of public and private sources. Sources for home health care funding include Medicare, Medicaid, the Older Americans Act, the Veterans’ Administration, and private insurance.
The costs range widely. The national average for a six-hour visit by a home health aide is $114, or about $19 an hour, says the Federal Long Term Care Insurance Program. That’s $29,640 a year for a six-hour visit five times a week.
5. Do you have the space?
Think over the logistics of having older people in your home. Could they get around easily and safely? Will they need to negotiate steep stairs? Is there room enough for everyone?
6. Should you remodel?
Remodeling to expand a home or make it more accessible can mean installing grab bars in the bathroom, widening doorways to accommodate a wheelchair or even adding a whole new wing. The New York Times writes about making those decisions.
Remodeling Magazine’s 2014 Cost vs. Value Report shows the average price of various types of remodeling projects by city.
7. Could you buy a new home to hold everyone?
Homes built to hold several generations are trendy right now. From Jacksonville’s Florida Times Union:
… prices for homes like these currently on the market typically start in the $200,000s. They include existing homes that have been altered to provide privacy and autonomy for different segments of the family. Modifications may include single- and multiple-story additions, changes to layout to provide separate living areas and even separate kitchen and dining areas.
More commonly, builders are meeting this demand by offering homes with a second master suite on the lower floor or an extra “flex” room that can be used as a den, office or extra bedroom.
8. What’s available in your town?
When you’re thinking through how a shared home might work, learn about services available in your community. The U.S. Administration on Aging’s Eldercare Locator can help.
For elders who can get around, local senior centers have classes, meals, field trips and adult day care programs. To find one, simply search with the words “senior center,” along with your city or county.
Are your parents living with you? How is it working? Tell us in the comments below or on our Facebook page.
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