How to Talk to Your Parents About Money

Senior Services

Issues arising from day-to-day care are very important for older people. In a recent survey, 90 percent of people older than 50 said they would prefer to remain at home as long as they can. This is an important financial decision for you and your parents to discuss.

If they can stay at home, but their mobility is limited, look into transportation and meal programs available in your community.

Another inexpensive option may be in-home non-medical care which averages about $18 an hour.

If they need more assistance, then you may have to consider assisted-living facilities or nursing homes. This can be an expensive option. A recent Genworth Financial Survey found that the average annual cost of a private room at a nursing home was $74,208 and a one-bedroom unit at an assisted living facility was $33,903.

Consider Long-Term Care Insurance

With more than two-thirds of people over 65 eventually needing some sort of long-term care, you and your parents should also consider getting long-term care insurance.

Medicare does not cover the cost of nursing homes, and one-third of all nursing home patients are not eligible for the government health care insurance program, so you will eventually dip into your parents' or your savings.

Reverse Mortgages Allow You to Borrow Against Home Equity

If your parents do want to stay in their home but do not feel they will have enough money for retirement, you may want to have them consider a reverse mortgage. Now these transactions are very complicated, so you will need to talk to an expert. You can locate one in your area at www.reversemortgage.org.

Basically, the way a reverse mortgage works is that if you are older than 62, you can borrow against the equity in your house and convert to a cash flow while you live in the house. The loan, interest, and other possible fees must be paid back when the last living borrower dies or the house is sold.

Now again, these mortgages are not for everyone, and they can be expensive, especially if a death occurs or your parents move out soon after you get the mortgage, but it is something to consider if you are really in need of funds. The AARP Web site has excellent information about reverse mortgages that you should definitely review before considering a reverse mortgage.

Mellody Hobson, president of Ariel Investments in Chicago, is "Good Morning America's" personal finance expert. Click here to visit her Web site, www.arielinvestments.com.

Amar Parikh contributed to this report.

-- This embed didnt make it to copy for story id = 8072236. -- This embed didnt make it to copy for story id = 8072236. -- This embed didnt make it to copy for story id = 8072236. -- This embed didnt make it to copy for story id = 8072236. -- This embed didnt make it to copy for story id = 8072236. -- This embed didnt make it to copy for story id = 8072236. -- This embed didnt make it to copy for story id = 8072236.
Page
  • 1
  • |
  • 2
null
Join the Discussion
You are using an outdated version of Internet Explorer. Please click here to upgrade your browser in order to comment.
blog comments powered by Disqus
 
You Might Also Like...