Taking care of our own parents is an external factor that can certainly derail a carefully planned early retirement.
I see that the older people get, the more expensive health treatments get as well. I see this as a big risk and it might be extended to siblings if they need help from us later in life.
How can this be factored in in our calculations?
Posted Aug 10, 2018, 7:47 PM UTC
I struggle with thoughts of this as well. I watched my mother care for my dying grandfather after my grandmother passed away. My fiance and I have already discussed this as a closely held belief.
If you, and your spouse if applicable, agree to pursuing this as your duty, then start planning early and involve your parents. Offer to walk with them through things like insurance and investing. Keep in mind, parents are not well versed in taking advice from their children.
I'm not an insurance agent, but you may want to look in to a long term care insurance policy for your parents, if they can't afford one themselves. As women generally live longer, the male usually burns through the entire nest egg in under 5 years due to the cost of elder care. Then the woman is left with nearly nothing.
Hope this helps.
Yes I think in this case it would be better to work together towards getting them on to a better position. I see a complication which is timing, if someone is starting the road to FI at say 30+ their parents may on their own have little room to improve their finances before retirement. I guess it is a complicated subject with lots of risks.
Talk to your parents about their financial situation and wishes. My mom and I have discussed this (along with what she wants done when she dies). We agreed that when she gets to the point where she needs more help (not medically, just physically with errands and stuff) she'll move to where I am. Since I'll likely be in Europe at that point we're both preparing for this by getting Italian citizenship (through ancestry) so the move will be easy if/when it becomes necessary.
As for medical, my mom has 0 desire to live a sub-par (for her) standard of living. She's made it clear she'll off herself before she lets her health get to the point where she needs significant medical help just to live. I feel the same.
We just had a friend die and watching him deteriorate in the last few years of his life was just miserable. He was miserable. His family was miserable. Everything sucked for everyone. In the last few days of his life we sat and watched him on his porch not able to feed or toilet himself. Not being able to walk. Not able to have a conversation. Barely able to acknowledge someone when they greeted him. We both agreed that it would never ever get to that point for either of us.
The problem with your plan is that by the time a person is ready to die, they are too feeble to kill themselves and the people around them are not going to do it for them or facilitate it. My father felt the same as your mother, but had a stroke at 80. After that, he was no longer in charge of any of his own health decisions. I would look into Italian laws on assisted suicide at some point. Good luck.
you think taking a bottle of pills takes a lot of effort? i would never let myself get to the point where i couldn't take a pill on my own. If my mom had a stroke at 80 and could no longer make her decisions, I would make them for her and assist her with what her wishes are. I would expect her to do the same for me.
I just went through this with my father so I know how difficult it is to take a bottle of pills after a stroke. He couldn’t. No one was going to pour a bottle down his throat for him, because we hoped stroke rehab would improve his condition (it did not), stroke patients lose the ability to swallow easily, medical providers became heavily involved in his care and in monitoring his situation, it would have been murder in our state, and, at the end of the day, none of us was prepared to do it. At the end, hospice gave us a large dose of morphine which we probably could have used to speed things up, but only by days (we did not). Many people say “at the right time, I’ll just kill myself.” Few people actually do it, mostly because when the time comes to pull the trigger, you have neither autonomy nor privacy nor the means to do it without a criminal investigation. Easy to say, hard to accomplish.
we shall see what the future brings.
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Both parents are dead, problem solved.
The best way to plan to start gathering information. Have a conversation with your parents now, while everyone is healthy. Ask them about their long-term plans, desired lifestyle, insurance (life, long-term care, etc.), funding sources for retirement, and home/mortgage status (then look up your state's homestead laws and consider their ability to pull equity via sellings/HELOC/reverse mortgage).
I think you're getting some good emotional support type of answers, but here are a few things you can do to tangibly get ready.
- Medicare, Medicare, Medicare - and Medicare supplements. Get everyone on all the right government programs. Not just the basic coverage. Get those supplements like Part B and Part D. Because my grandparents and mom did this, I didn't even had to learn too much about it. They had co-pays and things like that but, for the most part, they had GREAT health coverage.
- Discuss end of life care. Put it in writing, with an attorney if they will sign off on it. If they start to show signs of dementia, you're going to wish you had those conversations before you needed to. If they start to become weak at home and there's a fall risk, do you know if they want assisted living or to risk falling and dying at home? If someone is incapacitated with a heart attack or a stroke, do they want to be kept alive artificially for a few days to see if they improve or is there a point where you put a DNR in place and let them go? This also can help you decide whether or not you'll be pursuing expensive treatments.
- Plan for discretionary care. Assisted living is covered by Medicare or Medicaid (I forget which one), but those facilities are straight garbage for the most part. Independent living is over $2k/mo, assisted living is often around $4k/mo, and memory care can get up to $8k/mo. People tend to spend 3-8 years in assisted living before death. Discuss your philosophy about this and don't be caught off guard if you need to pay for these things.
Items 1 and 2 should help preserve your financial picture. Item 3 is the wildcard, but starting to get ready years beforehand can soften the blow.
It's not cheap. My mother-in-law had a stroke a few months ago. She didn't have insurance. Luckily the county she lives in has plans for low income people so she gets the care she needs.
Someone needed to help care for her so one of her kids had to miss work. After 6 months she finally got approved to get home care and just started getting disability checks.
That's their job, I wouldn't worry about it
You figure out what you think it'll cost your parents, subtract what they have budgeted for it, and then you add that into your FIRE number.
If you don't have either of the first two numbers, how can we help you? If you do have both of them, it's just math.
If your question is "how do we deal with whether or not to pay for their medical expenses," that's an r/relationships question.
What I struggle with is how to calculate something that might happen in 10yrs. I mean say one of them falls and need a $10K hip replacement(just throwing out a number) how do I know this calculus is ok or even if the risk is properly assessed?
I guess I am asking this for myself as well, how to calculate something that is so far into the future?
i dont think the question is a 10k hip replacement. that's a relatively smaller amount of money.. where you need to be looking is at what if they need full scale nursing care for Alzheimer's for a period of 5 years. that could be on the scale of 300-400k for a single person.
Insurance vs self pay is the question.. are the assets high enough to self cover? if they are, nothing to worry about. if they are not, insurance to cover expensive disasters should be considered.
if the assets are not enough to purchase insurance, it may be time to consider another country where care could be cheaper, or how to generate more income/assets/delay retirement.
find a reasonable worst case scenario. plan for that, what's it take for you to pay to close that gap and what does that do to your FI plan?
Presumably those same calculations are built into your own FI calculations, right? They're even harder to calculate for yourself than for your parents, since you're retiring way after them.
Honestly, trying to budget for "well X might happen, what do I do then" is exhausting, and you will never get to the bottom of that list.
That's what insurance is for. Figure out what some bad-ass insurance that'll cover all this stuff for your parents will cost, and build that into your number if you really think you want to pay for it.