Wealth management

“I just don’t want to be a burden to my family.”

It’s a common sentiment for anyone pondering long-term care. After all, nobody wants their final years to be a source of stress for loved ones. But according to Melody Evans, a TIAA Vice President Wealth Management Advisor in Portsmouth, NH, this fear of being a burden can be counterproductive. It shuts down the very conversations and preparations required to take the stress out of long-term care planning.

“Both generations tend to treat these discussions as taboo,” says Evans. “Parents say, ‘I don’t want to bring it up with my kids—I don’t want them to have to worry about that.’” Meanwhile, adult children sometimes avoid tough conversations too. Says Evans, “They’ll tell parents, ‘I’m going to stop you right there, Mom and Dad. You’re never going to age.’”

Mutual avoidance creates a dangerous void. Without transparency and planning, families may face difficult decisions during moments of crisis—when emotions run high and time is short, says Evans.

Essential conversations to have now

Long-term care isn’t simply a problem you throw money at. It’s nuanced, vulnerable, and sometimes uncomfortable. Regardless of financial resources, family members will likely need to be involved in some capacity. The key is figuring out how they’re involved and what those responsibilities look like—conversations that should start sooner rather than later.

When families gather to discuss long-term care, certain questions must be addressed while everyone is healthy and clear-minded. For example:

Should I purchase long-term care insurance? Insurance products—whether traditional long-term care policies or hybrid life insurance policies that include long-term care benefits—can be valuable tools, but they’re not right for everyone.

Evans recommends that people between ages 55 and 70 at least get educated on the costs and benefits of long-term care insurance. This age window represents a sweet spot: You’re close enough to retirement to understand whether you can afford the premiums yet young enough that insurers will still cover you (many won’t insure people over 70).

The insurance decision follows a “donut” pattern. If you have very limited assets, Medicaid will likely cover the cost of long-term care. If you’re quite wealthy, you can private pay for care without insurance. Long-term care insurance serves the substantial middle ground—people who have enough resources to commit money to risk mitigation upfront but would struggle to private pay for extended care without depleting their life savings.

Traditional long-term care insurance operates like homeowners insurance: You pay premiums regularly, and, if you never use it, that money is gone. This “use it or lose it” feature, combined with significant premium increases over the years, led to the development of hybrid policies that combine life insurance with long-term care benefits. These hybrids have gained popularity because, if you never need long-term care, your beneficiaries still receive a death benefit. (Your TIAA advisor can walk you through the long-term care insurance and hybrid policies available through TIAA Wealth Management.)

Family health history inevitably influences decisions about purchasing insurance. People whose parents died unexpectedly, without extended illness, may not prioritize long-term care planning at all. In contrast, those who watched a parent struggle for years with Parkinson’s or Alzheimer’s may find that fear of covering those costs interferes with the enjoyment of their own retirements.

Even with long-term care insurance in place, critical questions remain: Where will care be received? Who will administer it? How much will it cost in your specific area? For some people, continuing care retirement communities (CCRCs) serve as their own form of long-term care insurance.

Where do you want to receive care? Are you adamant about aging in place, or are you open to different living situations if home maintenance becomes too much or mobility issues arise? This fundamental choice drives every other decision. Even if you want to age at home, your current residence may need modifications for first-floor living. You may need to budget for home-health aides as well as for services you’ve always handled yourself—snow removal, landscaping, transportation, and so on.

Who makes decisions if you can’t? This is perhaps the most critical—and most difficult—conversation. Many people imagine that incapacity will be sudden and obvious, like a light switch flipping off. In reality, cognitive decline typically happens slowly and unevenly.

Evans has dealt with clients who are experiencing obvious cognitive decline—obvious to their family, their accountant, and their financial advisor—yet stubbornly refuse to grant decision-making authority to their children. The solution, she says, is to discuss incapacity planning early, through concrete scenarios: What happens if your memory is failing but you’re otherwise getting around normally? What if you’re dealing with an illness where you could technically make decisions but can’t give your full attention to everything?

Article continues below