Elder-Care Costs Deplete Savings of a Generation

[question everything]

The New York Times

December 30, 2006
Elder-Care Costs Deplete Savings of a Generation
By JANE GROSS

To care for her ailing 97-year-old father over the past three years, Elizabeth Rodriguez, a vice president at the Federal Reserve Bank in New York, has borrowed against her 401(k) retirement plan, sold her house on Staten Island and depleted nearly 20 years of savings.

(snip)

Ms. Rodriguez is among the legion of adult children — more than 15 million, according to various calculations — who take care of their aging parents, a responsibility that often includes paying for all or part of their housing, medical supplies and incidental expenses. Many costs are out of pocket and largely unnoticed: clothing, home repair, a cellular telephone.

Adult children with the largest out-of-pocket expenses are those supervising care long distance, those who hire in-home help and those whose parents have too much money to qualify for government-subsidized Medicaid but not enough to pay for what could be a decade of frailty and dependence. The burden is compounded by ignorance, according to a study by AARP, released in mid-December, which found that most Americans have no idea how much long-term care costs and believe that Medicare pays for it, when it does not.

Families have always looked after their elderly loved ones. But never has old age lasted so long or been so costly, compromising the retirement of baby boomers who were expecting inheritances rather than the shock of depleted savings.

(snip)

Costs are astronomical for long-term, low-tech care, the sort most often needed by those who linger with Alzheimer’s disease or are too frail to get around on their own. Medicare is of almost no help, since it covers only acute episodes like a heart attack, cancer or repair of a broken hip. That means the elderly and their families are left to pay for assisted living (which averages $35,000 a year), nursing homes ($74,000) or home health aides. Only the very poor receive Medicaid, which pays nursing-home bills nationwide but home care in only a few states (New York among them), and nothing toward assisted-living rent.

(snip)

http://www.nytimes.com/2006/12/30/us/30support.html?_r=1&oref=slogin

[Bozita]

1. Lotsa DUers were gone last week. Excellent repost!

[Olney Blue]

2. Excellent article. K and R.

[pnwmom]

3. I don't think the taxpayers should be responsible for ALL of the people

in the article. Many baby boomers ARE burdened by elder care expenses because there's no other choice. But some of the financial decisions made by the families in this article don't make much sense. For example:

"The elder Schoengoods, both 86, own a home in Yonkers and a condominium in Florida and have assets enough for round-the-clock care, which can cost $100,000 a year. Still, their son, Matthew G. Schoengood, 49, vice president of student affairs at the Graduate Center at the City University of New York, has kicked in at least $1,000 a month since 2005, when his mother had the first of two strokes.

"Mr. Schoengood flew his family nanny to Florida, for example, to look after his father. Now that his parents are permanently up north, Mr. Schoengood orders their groceries online along with his own. “As a child, it’s just something you do,” he said. “Mostly you don’t even think about it.”

"His father makes a half-hearted effort to pay him back, but Mr. Schoengood always says, jokingly, “I’ll put it on your tab, Dad.” Typical of their generation, his parents fret about every penny. His father asks, incessantly, “Do we have enough?” Mr. Schoengood tells him not to worry.

"For sure, he hopes his own children will do for him what he is doing for his parents, but he cringes at the prospect of burdening them — one reason long-term care insurance is becoming attractive.

"Mr. Schoengood’s out-of-pocket spending is not sensible, elder-care experts say, but the result of the awkward minuet of preserving a parent’s pride."

SNIP

And he hopes that his own children will do the same thing for him? Geez.

No one who owns two homes outright and has enough income to pay for care costing $100,000 should be letting their children pay for thousands of dollars of their expenses every year. Why, since this couple is living permanently up north, do they have to hang on to a condo in Florida? Why should it be an issue of pride? This couple obviously accumulated plenty of assets: now they can spend them.

Chances are when this couple dies, their estate will be subject to estate taxes (which are still applicable on higher end estates). So it only makes sense to deplete the parents' assets before digging into the children's -- otherwise the money saved will go to the government in the form of estate taxes.

[ReadTomPaine]

4. Those aren't depleted savings, they are future corporate profits...

after all, if someone is able to take your money from you, it must be your own fault, right? Besides, what good is it doing supporting some old couple, when it can be accruing interest..

[Cant_wait_for_2008]

5. K&R. Great article.

[question everything]

6. And now the flip side - kids caring for their parents

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=364x3052159

[Cant_wait_for_2008]

7. Thanks for the link! eom

[Habibi]

8. Yes, and whatever might be left of the elder's assets

are taken by Medicaid to pay them back for nursing home expenses. So there goes whatever nest egg your parents worked to accumulate all their lives.


Is that wrong? I don't know. My husband and I may be facing this dilemma soon, ourselves, as his mother is declining. We may be lucky enough to be able to move in with her should she need constant care; our jobs are at this point flexible enough. And what kind of quality of life are we looking at, here?

My boomer cohorts and I are already saying things like: I'm offing myself at 75 (or whatever age they feel they want to depart)--I don't want to be a burden/live like a vegetable.

edited for crappy grammar :dunce: