Deciding where to live is an important part of retirement planning.
The risk people take if they put off this kind of planning until options narrow is greatly increased cost, says Andrew Novick, an attorney and vice president of client services at Condor Capital in Martinsville, N.J. He points to the experience of one of his clients who is putting her own retirement at risk in order to make sure that her mother is comfortable.
"Her mother has enough money for a few years of nursing-home living, then she'll deplete her assets and she could then qualify for Medicaid. But my client didn't like any of the available facilities that accept Medicaid. So my client has decided that when her mother runs out of money, she will pay the $10,000 a month to keep her mother in the facility. It will really hurt my client's own financial situation if she has to do that," Novick says.
Smarter planning earlier might have prevented the problem. Novick says his own parents, who are in their 70s, and his in-laws who are 10 years older, all live in over-55 retirement communities and are happy there. He advises his clients to take a look at that option because it is so flexible.
The communities differ, he says. Some of them have a younger, more active demographic than others. But nearly all of them provide good support systems for older people, allowing them to live independently longer -- even after they reach the point where they need additional help. "You can bring in an aide (at a relatively modest cost) on top of what's already available," Novick says.
Whatever living situation you and your parents choose, Novick believes you ought to start thinking about it earlier rather than later -- while you still have several options. It might not be an easy discussion, but bringing up the topic with your parents before there's a crisis is wise so you understand their wishes and you don't have to force a solution on them, he says.
And if you're the parent whose children bring up the topic, be grateful that they care.