How to Financially Plan for Taking Care of Your Parents

Whenever I go home for the holidays, my parents talk about selling their house. I hate this topic for many reasons but mostly because I love their house — it’s where I grew up and continue to store an embarrassing amount of crap that doesn’t fit in my own apartment. Sure, it’s bigger than my parents need, but it’s just the right size for me to visit with my kid and my spouse. I wish I could say that we have productive family conversations about this, but instead I revert to bratty teenage behavior. “If you moved, we’d never come see you!” I threatened last year. “There’d be nowhere for us to stay!”

Of course, what my parents are really trying to talk about is what will happen when they can’t take care of the house anymore. When the steep, creaky flight of stairs becomes a hazard, if it isn’t already. When they start forgetting to turn off the stove, like my grandfather did. Do we hire help for them, and what will it cost? Where will they eventually move? What does their insurance cover? Obviously, we’d rather argue about the house instead.

I know we will have to talk about this stuff eventually. And the sooner you start planning for your parents’ later years, the better off everyone will be, says Adriene Iverson, the president of Transforming Age+, a network of organizations that provide care to aging Americans. “When you have these conversations earlier, it helps you make decisions while you have the most options available,” she says. “Instead, what happens is that people wait until they can’t wait anymore, and then they might have only one option and it’s not even a good one.”

Fair enough. But where to start, and how to be delicate if your parents don’t want to discuss it (or worse, haven’t planned for it at all)? We asked some experts for their advice.

How do you even broach the topic of what your parents will “do” as they get older?

Start with the big picture, Iverson says. If you ask a broad, nonjudgmental question — “How do you picture your life in ten or 20 years?” — you’re much more likely to start a fruitful conversation than if you heckle your parents about the specifics of their retirement savings or lack thereof. Iverson recommends focusing on what they’re looking forward to, rather than what they need to worry about. “It makes a big difference if you have a positive outlook on aging — research has found that it even adds years to your life,” she explains. “Try to anchor the conversation to how they define quality of life and what community looks like for them.” From there, you can get more specific about what they might do, what they can afford, and what role you will have in their caregiving.

What if they stonewall or genuinely have no idea?

Offer to help them research. “A lot of people default to, ‘I want to stay in my home until I die,’ because they fear the loss of independence and identity,” says Iverson. Understandable; people like to stick with what they know, and no one wants to think about the moment when they have to pay someone else to wipe their butt in a nursing home. But there’s a wide range of living arrangements before that point, including home-sharing, affordable housing, and assisted living, Iverson says. Your parents may have some ideas, based on where their friends or other neighbors are doing; if they don’t, there are numerous organizations and state services that offer ways to search for housing by location, level of care, and cost. Plus many state and federal programs offer financial assistance for senior housing to those who qualify.

Even if it seems like your parents are eons away from needing to move out of their current home, it helps to start looking around and talking about what your parents might want, especially since many communities have limited availability and wait lists.

What about my parents’ health-care costs? Aren’t those expensive?

Yes. One recent report found that the average American should expect to pay about $165,000 in out-of-pocket health-care costs after age 65 — more than twice as much as they anticipate.

All Americans over 65 are eligible for Medicare, which will cover a lot, but obviously not all, of their medical costs. There are different types of Medicare, too, so you’ll want to familiarize yourself with your parents’ policy. Many people also buy supplemental insurance — known as Medigap — for out-of-pocket costs that Medicare doesn’t cover, including hearing aids (essential, if you’re my dad), dental, and vision services. So be sure to ask about that. Medigap premiums vary, but are usually around $100 to $150 a month.

Iverson also recommends asking your parents to consider long-term-care insurance policies, which can help cover costs of a nursing home, assisted living, or in-home care. The earlier they purchase a policy, the lower their annual premiums will be (around $950 to $1,500, on average, for a single 55-year-old, versus $1,200 to $1,900 for a single 60-year-old, per a 2024 survey). So it’s worth looking into well before you think you’ll need it.

What’s more, find out if they’ve bought life insurance, which may not be necessary but could benefit you or their surviving spouse. “No one ever knows where their life-insurance information is,” says Katrina Robinson, an attorney who specializes in trusts and succession plans for families and businesses. “Make sure your parent puts you in touch with their insurance broker and says, ‘Hey, here’s my daughter or my son. Please copy them in when we correspond, and make sure they have an abstract of my policy.’”

How can I get my parents to tell me about their finances, especially if they don’t like to talk about “that sort of thing”?

A tactful way to sniff around your parents’ finances is to bring up how you’re planning your own, says Robinson. “You could say something like, ‘Hey, I’ve been working on contributing more to my long-term savings, and I was wondering what you’ve set up for yours.’”

Eventually, the more you know about your parents’ financial landscape, the more prepared you’ll be to help them manage it. But start with the basics: what bank they use and a list of all their accounts (checking, savings, investment, and otherwise). “Then, encourage your parents to make sure their beneficiaries are updated,” says Robinson. Most accounts allow the holder to designate a beneficiary who receives whatever is in the account upon its holder’s death. “You might also encourage them to add you or another family member as a joint account holder, so that you can access their accounts and pay bills on their behalf if you need to.”

While you’re at it, have them fill out a power-of-attorney form online, which will give you or someone else they trust the ability to make financial decisions on their behalf if they’re unable or unwilling to do so.

What if my parents have debt that they can’t pay?

Some states have filial-responsibility laws that make a person’s adult children responsible for their outstanding bills, even after their death. However, those laws vary a lot state by state and are rarely enforced, according to experts. Creditors might still come after you for your parents’ debt, but unless you are named as a co-signer and have the means to pay, they usually can’t (or won’t) take you to court over it. Enforcement also depends on the type of bill that’s outstanding, Robinson says. Usually, when a person dies with outstanding debt, whatever assets they leave behind will be used to pay that debt, and it won’t be passed along to surviving family members. “But no matter what, it’s best to be aware of any debt your parents have,” she says.

What else should I make sure I know, while we’re on the topic?

This is a good thing for any adult to do: Use a password-manager service to list all your log-ins for important bills, insurance websites, and bank accounts, and make sure that a loved one knows how to access it. (I will never forget that after a family member’s mom died, no one could figure out how to log in to her computer to manage all her accounts, which stressed everyone out for days.) Then ask your parents to do the same.

Robinson also recommends asking your parents to designate a health-care proxy, or a person who can make health-care decisions on their behalf if they’re unable to do so. (Most states have a form you can fill out to do so online.) If you want to be extra thorough, the National Institute on Aging has a more complete checklist of information and documents to review with your parents.

What about a will?

I wholeheartedly believe that one of the most caring gestures a person can make for their loved ones is to spare them from the hell of paperwork that happens after they die. Still, making a will is intimidating, and it helps to hold someone’s hand while they do so. Find a lawyer whom your parents like and set up an appointment. If you can afford it, you might even pay the lawyer yourself, just for peace of mind. (Many lawyers will charge around $1,000 for a simple will, which is how much mine cost.) For more information about making a will, read here.

Anything else I can do?

Ultimately, the more open your parents are about their finances as they age, the better equipped you’ll be to help them, whether you like it or not. Families are complicated! But remember, there are a ton of services that can help. “No one with an aging family member is alone,” Iverson says. “The more information you have access to, and the earlier you can access it, the more options you’ll have.”

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