retirement

10 ways to survive the sandwich years

6. Consider a reverse mortgage. If your parent owns a home, a reverse mortgage could provide a needed income stream. This is a home loan that converts a portion of the home's equity into cash payments to the homeowner. But the homeowner is still responsible for property taxes and insurance. And there are a few other caveats.

"It's not taxable income to the beneficiary, which is the parent or homeowner, but they have to remain in the home. Once they leave the premises, they have to sell their home or pay off the debt within 12 months after leaving," says Thomas Space, of Advisors Financial Planning Group in Gilford, N.H.

If your parents are joint owners, it's possible that one parent can stay in the home if the other parent needs to go to a nursing home. But these rules are complicated. Check out the AARP Web site to get some basic facts on reverse mortgages and be aware of the pros and cons.

7. Reduce health care costs. If your mom is getting by on Medicare, that's fine while she's still healthy. But adding a supplemental insurance policy may save a lot of headaches -- and money -- if she ever needs to be hospitalized. And most seniors struggle with the high cost of medication. If she doesn't have a discount card to lower expenses, ask her pharmacist to help you evaluate the Medicare Part D programs.

Long-term care insurance is something to consider in your 50s or 60s.

"Typically, once the parent becomes 70 or older, even if you want to get the long-term care insurance, the premium is too costly or the parent's health makes it prohibitive," says La Spisa. Instead, consider getting a policy for yourself as a part of your own retirement plan.

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And if you're thinking of distributing your parent's assets as gifts or by "spending down" to qualify for Medicaid, seek legal advice. "You can really mess things up if you don't do this correctly. Only an elder law attorney in your state will know how to advise you regarding these issues," says Reaves. The Centers for Medicare & Medicaid Services Web site gives basic information on eligibility rules and services.

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