Helping Your Senior Understand and Prepare for the Rising Cost of Aging

Let’s face it, getting older is expensive.

More and more of our senior loved ones – and even ourselves – are realizing that aging comes with costs, both expected and unexpected, for which we might not be financially prepared.

A recent report by Genworth Research found that 53% of us have not made any financial plans for our retirement and aging needs.


Four out of ten people surveyed expressed regret over the fact that they are not financially ready for retirement.

Is it too late? What can we do to move toward more financial security for our senior loved ones and ourselves?

Why and What Do You Need To Save

Adults in the survey felt that they would need $1.7 million for retirement. Each person is different and will have different financial needs, but that is a pretty big number.

Unfortunately, many of us don’t take into consideration the amount of money we may need for long term health care. Perhaps we think that Medicare will meet our health needs; however, that does not cover all the costs of healthcare we will have.

What expenses should our senior loved ones anticipate as they age?

  • Housing – Very few of us own our homes outright anymore and the figures point to only 30% owning their homes free and clear. Many seniors have taken out home equity loans, reverse mortgages and second mortgages to help pay bills or other financial needs, including helping their children. These extra expenses will make it difficult in retirement when income is reduced or fixed.
  • Medical Expenses – This includes supplemental or long term care insurance payments, co-payments, out-of-pocket expenses, medications and equipment needs. Falling into the doughnut hole can cost a fair amount, though this is supposed to be better controlled under the Affordable Care Act. Dentures, hearing aids and eyeglasses typically aren’t covered by Medicare and will need to be planned into the budget so that they will be available to prevent isolation, malnutrition or depression (not being able to see or hear affects mood and inability to chew their food can lead to health decline).
  • Home Modifications – Changes to their home so that your senior can safely age in place are often not taken into consideration. There may be quick fixes that cost only a small amount of money or there may be large costs required, for wider doorways or ramp installations for example. What about the yearly property taxes on the home in which they wish to live for the years to come? Will they be covered?
  • In-home Medical Care – Many will need help if they want to stay at home when when functional status begins to decline. Getting help performing activities of daily living such as bathing should be planned because it may be more essential than you imagine. Custodial care is not covered under Medicare.
  • Assistance Around the House – There should also be a plan for funding people to help your senior with things like housework, laundry, cooking, delivered meals or other services that support their ability to live at home.
  • Entertainment – Expenses covered such as a movie ticket, getting a haircut or perm, having the newspaper delivered, or getting cable TV? Will they have spending money to buy gifts for grandkids or donate to the church?
  • Senior Living Facility – Financial preparations should be made, even though your senior may not plan – or want – to go there. Your senior may not have a choice if placement is needed. You may not be able to help them or provide twenty four hour care resulting in having to find them alternative living options such as assisted living.
  • Transportation – Costs such as a car, insurance, taxes and vehicle maintenance. Will a new car be needed in the years to come? How about the cost of gas? What if they get into an accident?
  • Home Maintenance – Expense such as home repair, roofing, heating, plumbing and yard work can add up if the home in which your senior lives is older and needs upgrades or repairs. If the heating or air conditioning unit needs to be replaced, will there be adequate funds for that? The mechanical systems of an older home are vulnerable for repair which could be a costly investment in the future.
  • Pre-arranged Burial Needs – While probably not the most enjoyable to consider, these should also be part of a financial plan for aging. No matter what your senior desires be done after they pass, such as where they will be interred and the cost of a funeral, should be planned now.
  • Regular Monthly Bills – This includes items such as utilities like electric, gas, propane, water, sewer, mobile service, and other monthly costs.

Everyone should make a list of the items they anticipate so covering them is part of the financial plan.

Tips for You and Your Senior to Get Retirement Ready

There are some plans that you and your senior can get together now to better prepare for retirement. Here are a few suggestions of things to do.

  1. Set a realistic goal for the amount of money your senior will need in retirement. There are calculators that can help you determine an amount. There is also a replacement formula that can help determine the amount of income needed when they no longer get a paycheck. Many like to use a rule of thumb, to secure 70% of your prior income level for costs of retirement, and then work backward to decide where they stand. It is realized today, though, that needs and calculations are more personal and may not fit a cookie cutter guide. To help them plan for the future, your senior can check their projected income from social security at their website,
  2. Prepare a will and execute advance directives if your senior has not already done so. Both your senior and you should do this. Caregivers should be sure this is done in case they are unable to continue caregiving.
  3. Consider meeting with a financial planner or elder law attorney, who can give you guidance about retirement planning. They can help determine if enough is being done to prepare financially for retirement or if more financial arrangements are needed and help with plans for success. Perhaps setting up a trust would be beneficial for your senior.
  4. Make a budget now to be able to pay off outstanding bills and reduce spending so that more saving can occur. Help your senior get their finances in order before they bail out the kids or grandkids who, unlike your senior, have time to regain their losses.
  5. Consolidate any outstanding loans to reduce outstanding bills, such as second mortgages, etc. Will it help to pursue refinancing, reverse mortgage or other solutions? Can they pay off mortgage or home equity loans now, should they?
  6. Does your senior have a life insurance policy that can be leveraged?
  7. Is it too late for long term care insurance?
  8. Would it be financially productive to downsize the home now or move to a facility where care needs can best be met?
  9. Is your senior receiving all the benefits to which they are entitled? If not, it is time to pursue benefits via
  10. Roll all your seniors 401K accounts into one, don’t have accounts spread around potentially being forgotten or charged fees that can be avoided.

Depending on your senior’s financial situation, spending habits, and goals for retirement, these suggestions and more can help them be financially ready no matter what the future brings!

When you’ve helped them prepare, don’t forget to do the same for yourself!

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