Ways to find a little wiggle room in your finances
The Baby Boomer Squeeze
TDS Reader Contributors
You're 55+ And You Didn't Save Enough for Retirement
Factors to Consider to Determine the Best Retirement Age for You
Closing in On Retirement with Very Little Savings
I am hoping that you can help us out or direct us to resources that can give us some ideas. First, I refer to the situation as "The Baby Boomer Squeeze" because my husband and I are in a situation a lot of baby boomers are. We are trying to save for retirement and pay for our kids' college. Now, we are in another phase of financial crunch. Our parents are retired. Just recently my husband's mother entered a nursing home. Now we have to try to cover the expenses not covered by Medicare. Short of winning the lottery, any help in ways to earn extra income at home or to reduce costs in the nursing home would be appreciated. We did consider having her live with us, but she wanted to stay close to her home where she has lived for the past 70 years. How are others handling this and what advice can you and readers offer? Thanks.
I read with great interest Charlene's plight of nursing home costs. I work for a Human Services Dept. in Ohio (aka "the welfare dept.") and I recommend she check out her county Dept. of Human Services. Her parents may be eligible for assistance with their nursing home bills, depending on their income and their resources. If the parent is in need of help to cover the costs, they may very well be within the limits and the state will help pay the expenses. The medical offered through Human Services is called Medicaid-not to be confused with Medicare from the Social Security Administration. They are two separate government health insurance plans and you must apply for both separately.
Also, make sure your elderly parents are covered not only by Medicare Part A, but also Part B as soon as they are eligible for it. Part A covers major medical costs (in hospital, not nursing homes), but Part B covers test and lab fees. Medicare from SSA can only cover the first twenty days in a nursing home and only then if the client is in rehab and expects to get out. The twenty days gives the medical professionals the opportunity to determine the needs of the patient. The Social Security Administration is on the web and I downloaded their entire book explaining what Medicare can and cannot do. Ask your parents if they have any health insurance from their former employers that may help with expenses.
Before your parents even need to look at assisted living they may want to look at "stop-gap" health insurance. My parents had AARP (American Assoc. of Retired Persons) and it really did pay. As our parents grow older we, their children, must know their needs, desires and what their real assets are. They are tough questions to ask but ask them anyway. It really gives them control over their lives at a time when they feel totally out of control and helpless.
College Financial Aid
This is in response to the lady who needs help financing retirement, college for kids, and a mother-in-law in a nursing home. My advice is to make the kids get financial aid for their own college. I am about to graduate after putting myself through and got excellent grades so my junior and senior year were paid for by scholarships. Students do a lot better in school when they have to work for it themselves, and are not just coasting along on mom and dad's money. I have several classmates who are graduating with me and their grades are terrible because they were only attending college because their parents wanted them to and paid for it. These people have now blown any chance at getting into medical school and a lot of other graduate schools because their grades are so poor. It is very competitive out there. Also, I went to a state college so the cost was not nearly as prohibitive as a University. My parents had three kids close together and they knew they would never retire if they paid for us all to go to college. They have helped out a little here and there, but I am so proud of my degree because I did it myself. If nothing else have them attend state college so you wont end up bankrupt. And tell them they should try to keep the GPA up so they can get grants and scholarships from the state and the school. Most employers are more interested in grades and experience than what college was attended.
And most importantly, do not claim your kids as dependents when they are about to graduate from high school. This may hurt a little on your tax refund but it will destroy your kids chances of getting "independent" grants and loans. In other words, if your child is graduating this Spring, do not claim them as a dependent. Once a college student is labeled "dependent" by the financial aid office, they are always considered dependent by the government and will be ineligible for Pell Grants and many other grants. Or consider paying for their college until they are considered independent by the school. Then they will be in shape to get good financial aid.
Delay the Nursing Home
Having gone through the same situation with a grandmother and a father-in-law, I would really encourage them to do everything they can to keep Mom out of the nursing home for as long as humanly possible. I can understand why parents don't want to move in with, or closer to their adult children. It will require some getting used to. But life never stays the same. Maybe they were lucky enough to live in the same home for decades, have the same friends, shopping habits, etc. for decades. But when you look at the cost of a nursing home for the privilege of things staying pretty much the same, they are paying dearly for it. If my husband and I were living in a part of the country where we couldn't find employment, we'd make a change. As much as older people don't want to make a change, sometimes they have to for economic reasons also.
My grandmother and father-in-law both entered nursing homes and the yearly cost was far more than our gross family income. If only they had agreed to have a home helper, or someone to keep up the garden, make the meals, etc. for a few years. They could have both kept out of the situation where more than their entire life savings were spent in less than five years.
Please do the math on this one very carefully. I understand that not everyone can take Mom or Dad into their homes. Parents and children are sometimes too different or can't/won't make the adjustment. And parents sometimes are too suspicious or too proud to use home helpers. But if it's possible to keep them out of the nursing home, I think that's the most economical solution of all.
Reduce College Costs
I don't think that college has to be as expensive as most think. The figures that we hear from "experts" are the most expensive scenario figures- boarding on campus in the dormitory all four years at a private college.
There are cheaper alternatives. Your children can attend junior college for the first two years of college. That reduces the cost considerably. Your children can go to a college nearby so they can live at home. Your children can go to a state university instead of a private college.
Don't overlook requiring your kids to contribute money to the cost of college, either. There is no reason that they cannot put some money away for college now, as well as having a part-time job when they are in college.
Shouldn't Have to Pay Nursing Home Costs
I am a Medicaid - Medicare Reimbursement Specialist. Your mother-in-law should be applying for Medicaid NOW before her Medicare nursing home coverage runs out. The nursing home should be helping you apply for Medicaid. There's no reason for either you or your husband to be giving his mother money "on the books". Legally, even when she is on Medicaid, you will be able to give her small gifts of furniture or beauty parlor trips. You should not be spending a penny for someone else's N.H. costs.
Don't Forget Your Retirement
It's tough having a parent rely on you when you are trying to keep your own family afloat. Unfortunately, the best way to handle this is to allow your mother-in-law to use up her financial resources and go on Medicaid. This will pay for all her needs and still leave her a small stipend (approx. $40 a month) to use to get her hair done, etc.
Right now your most important duty is to save for your retirement so that you won't be a burden to YOUR kids. Your children can get scholarships, work to earn money and pay for their own college, but they may not have the resources to help you when you get older. Therefore, please work on savings for yourself. Your parents had the same opportunities to save. Sometimes it just doesn't work out. You can help them in many ways other than financial. One of the best ways is to spend time with them. Take their laundry home and do it --that saves lots of money. Get them gift certificates for long distance phone service so that they can call friends, etc.
Have you started preparing for retirement?
Our pre-retirement checklist will walk you through the steps you need to take.
Ask for Ombudsman
I have worked as a charge nurse in a nursing home for many years and am wondering why this family is worrying about covering costs for her mother-in-law while she is in a nursing home for care. Your mother-in-law's assets should be what is taken into consideration for coverage of payment. If she does not have the resources, then see what state funding is available.
If all of this has been done, I would suggest contacting the ombudsman for that facility. The name and number should be posted in the facility. If not, ask. Tell her your story and see what suggestions she can offer you. I do not believe that you should be responsible for any monies. But if the facility believes that they can convince you to pay, they may try to make you believe that you are. Investigate further. Speak directly to the facility administrator. The office manager may be taking extra money off of the top that is not owed, and therefore, not counted (it happened where I worked). It sounds fishy to me. You should not be responsible for your relative's bills. Period.
Speak to your ombudsman, she is a patient advocate and a wonderful resource for nursing home information. If she doesn't have the information you need, she will guide you in the right direction.
Surprised What Medicare Paid
My mother is also in a nursing home. The emotional stress is compounded by the financial. Did you know that if your mother is declared indigent that MedicAid will pay for nursing home care? You can check a local library for the exact regulations. Don't be ashamed (pride is a problem we had)..we figured that we have paid INto the tax system all these years....now it is our turn to take OUT....this is what our tax dollars are supposed to do!
My mother lived for a while with my brother's family and it was not the best situation.....very, very difficult on all involved. Sometimes a nursing home is the best (or least worst) option. Visit your mother OFTEN...call her...write to her...put lots of photos in her room....have the children draw her lots of pictures....loneliness is a big problem with nursing home residents.
Mother has excellent medical insurance which has paid for many things (except the nursing home) and Medicare has picked up some other things. We have spent a lot of time researching exactly what Medicare will and will not pay.....you may be surprised at what they will pay....we were.....there are a lot of weird regulations in the Medicare laws.
The best I can offer you is empathy....I am right there with you.
Carole in Nashville
It is difficult in many ways, but the financial part is very worrisome. Luckily, my folks have some income coming in from rentals so they are able to afford live-in help. It actually is less than the monthy rates in a nursing home and the care is wonderful and they can stay in their own home with their "things", which is comforting. I went to Alliance on Aging and they put me in contact with people that do live in. They do not hire or have anything to do with the hiring except to put private people in contact with each other. You do need to check the person out the same as you would for your children's day care provider. There are agencys that hire the caregivers and then send them to you, but they are very expensive. Also the Visiting Nurses Association is a very good source and is covered my Medicare. They send in a team to access the home and patient and will advise you. I would also check with a financial planner in your State to see what you can do to use your parents assets for care.
Good luck and remember to take care of yourselves. You do the best you can and then don't feel guilty that you can't do more. A really good book is "The 36 Hour Day". I have lent my copy out so not sure of the authors name, but it gives you a lot of insight into the care of the elderly.
Take the Next Step
- Use this tool to maximize your retirement by determining the best age to take your Social Security benefits. Don't leave thousands on the table by taking Social Security at the wrong time.
- Determine if debt could derail your retirement and what you can do about it now. Our checklist can help you. Afterall, one of the most important ingredients for a comfortable retirement is to be debt free when you retire.
- Subscribe to After 50 Finances. You've learned how to work smarter, not harder. This weekly newsletter is dedicated to people just like you. Subscribers get a FREE copy of our After 50 Finances Pre-Retirement Checklist, a list of everything you need to do to be ready for retirement.