Updated June 17, 2022 – When your parents live longer than they thought they would and end up outliving their retirement savings – what do you do? What can they do? It’s something not many older adults and family caregivers plan for but if you having elderly parents, I urge you to take the time to talk to them about this issue.
So what can you do with aging parents who have no money? – Know what they have and what they owe. Raise funds by selling, moving and/or working. Ask your family, friends and community for help. Look into and use the many federal, state and local resources available for low income seniors.
The average retirement age in the United States is 65. This means that, for many people, their parents will be of retirement age when they reach adulthood. While some parents are able to continue working well into their 60s and 70s, others may find themselves unable to work due to health problems or other issues. This can leave their children in the difficult position of having to support them financially.
The bottom line is that it will most likely take a team effort to help you and your parents get through this type of financial situation.
If your parents did not invest in long-term care insurance, or if their insurance policy does not cover the full cost of care, there are still good options available. Medicaid and Medicare are two government programs that can help to cover the costs of long-term care.
You may also be able to find financial assistance from your state or from private charities. Do not be afraid to ask for help – there are many people and organizations who are willing and able to assist you in paying for your parent’s care.
There are many difficult decisions (including financial) that you may have to make when it comes to the care of your parents.
If they are unable to care for themselves, you may need to make arrangements for their care. This can be a difficult and emotional process.There are a few things that you should keep in mind when making decisions about your parent’s care.
- First, you should make sure that you are making the best decision for your parent’s health and well-being.
- Second, you should be aware of the costs of various care options and make sure that you can afford the care that your parent needs.
- Finally, you should be prepared to ask for help when it comes to paying for and arranging care for your parent.
The sooner you and other family members can make these decisions, the better it will be for everyone in the event that your parent(s) require help as they grow older.
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My Elderly Parents Are Broke
As our parents age, many of us find ourselves in the position of primary caregiver. This can be a difficult role to take on, especially if our parents are not able to financially support themselves.
I’m sorry that you are having to go through that.
Two very good and old friends of mine are in this type of mess right now with their parents and we (all their friends and family) are working together to brainstorm what can be done for them and their elderly parents.
Here are their stories:
My friends Sarah and Zachary and their parents live in Georgia. Sarah has a father who is 93 and a mother who is 89. The father has severe Parkinson’s and is living in an assisted living home. Their mother is living in a house in a 55+ community. They have a slew of medical bills, household expenses and more.
The parents are living on social security and an annuity which ends next year. No other savings accounts.
Once the annuity ends – their father will have to leave the assisted living home because they cannot afford it any longer and he will be moved to a nursing home. Their mother will have to sell their home to pay for the nursing home and move in with her daughter who lives on Long Island. That means not only moving but leaving all her friends and family here in Georgia.
My friends Angela and Steven and their parents live in South Florida. Angela has a father who is 91 and a mother who is 88. The parents both continue to live in the same home that they have lived in for the last 35 years. Angela’s father is showing signs of dementia and her mother has severe arthritis which makes it very difficult for her to walk without assistance.
They have no savings and live strictly on their social security. Their home and cars are in constant need of repair and their children are currently all sending money to their parents monthly to help them pay for utilities and food.
In the past 2 years the children have had to pay for a new roof on the house, a new television, engine repair on both cars, various plumbing and electrical repairs in the home and smaller miscellaneous other charges.
The majority of caregivers (78%) say they incur out-of-pocket expenses as a result of caregiving and, on average, are spending one quarter of their income on caregiving activities. This kind of spending can have a significant impact on your long-term financial security.morganstanley.com
The main problem with Angela’s mother is that she has an addiction to online shopping. Her spending habits keep her and her husband in poverty and the children resent sending money they feel will be spent frivolously. It’s a difficult situation.
When your parents have no money – and the situation may be due to no fault of their own – it’s much easier to help them out.
But, when they contribute to their own financial problems due to poor judgement or an issue such as a shopping addiction – it’s easy to see how regrets and anger can become part of the daily conversation.
One of the most difficult conversations you can have with your aging parents is about their estate planning. It can be a very sensitive topic, particularly if your parents are struggling financially. But make no mistake it’s extremely important.
With our parents living longer and longer, the prospect of outliving your savings gets very real.
In 1950, 8.4% of the U.S. population was over 65, and 1.2% was aged 80 or above. In 2000, the 65+ share of the population went from 8.4% in 1950 to 12.3% in 2000.Forbes.com
It may be useful to approach the topic with a financial planner first to see if there is anything that he or she can do to help.
So, what does a family do when their senior loved ones are either without money or their habits and lifestyle have forced them into poverty?
Well, read on.
How Do You Financially Help Aging Parents?
There are multiple unforeseen expenses that can come up during the golden years. Health care issues and costs can come up. New housing situations may be needed. Home care services might be required for personal care and much more.
I tell my friends that “It takes a lot of money to grow old.“
If the situation has gotten to the point where you will need to help your elderly parents financially, then there are going to have to be some difficult decisions and tasks ahead for you and your parents.
Here are some tips on what you can do:
- Have a serious conversation with your parent(s) about their situation. Sometimes, the best way to begin this conversation is to bring in a 3rd party such as a financial advisor to help. Of course, discuss this with your parent(s) first. There’s a great book that I can recommend called Mom And Dad – We Need To Talk by Cameron Huddleston that can help you through this.
- Before any actions are taken – sit down with your siblings and/or family members for a family meeting. I would recommend to include your parent(s) in this conversation but that will depend on the cognitive level and willingness of your parents to work with you.
- A very important thing to remember is that you do NOT want to jeopardize your own retirement. So be careful of over spending your own money to care for your parents.
- Make a detailed list of how much money may already be saved in bank accounts, investments such as stocks, mutual funds, etc. as well as any debts owed. It’s a very good idea to have an accurate account of your parents’ personal finances.
- Make a detailed list of any steady income such as social security, pensions, annuity funds, etc.
- Decisions will have to be made on what assets can and should be sold to raise cash. Also, what lifestyles changes will need to be made. This could include:
- if your parents are living in a home they own, selling the home may be necessary
- downsizing to a smaller new home or assisted living facility
- moving to a rental vs. purchasing another house
- moving in with a family member, room mate, etc.
- selling unnecessary furniture, clothing and any other items to raise cash
- if your parents are capable – working part time is an option. In my community, I see quite a few retirees working at fast food restaurants, retail shops, the library and grocery stores. For some seniors this is not ideal – but it may be a necessity.
- You may also have to raise some extra cash to help your parent(s). Again, selling some of your possessions, possibly downsizing your own home, etc. So, please do not discount this as a possibility, if it’s needed.
- Consider a Life Settlement. If your parents have a life insurance policy, it may make sense for them to sell it to a third party (instead of back to the company they purchased it from) for a lump sum. Read more about life settlements here.
- Create two separate budgets. One for your own family and one for your aging parents. This helps you and your family keep track and allocate the monies going in and out of their “account”.
- Cutting down housing costs. If your parents are living in an assisted living community that they can no longer afford, it may be beneficial to help them move to another type of housing that can fit their budget.
- Consult with your accountant or financial expert. Hopefully you have an accountant who may be able to provide some financial help with budgeting, possible tax breaks, etc.
- Check their health insurance. You want to make sure they are getting all the possible benefits they are eligible for.
- Rally the troops. All siblings and other family members (and sometimes friends) could all help to contribute either with money or a service. An example would be that cousin John could mow the lawn and care for the yard so that your parents don’t have to pay for a lawn service.
- Take advantage of the resources available for low income seniors.
- Of course Medicare is the most popular resources for seniors – if you’re not familiar with Medicare – here’s a great primer to help you out.
- Medicaid is a program run by your state and each state is different. Here is a list of contact information for the Medicaid office in each state.
- State Pharmaceutical Assistance Programs (SPAPs) assist low-income seniors with their prescription drugs. Here is a list of the states that do offer this type of help.
- There are many pharmaceutical companies that offer Patient Assistant Programs (PAPs). “Patient Assistance Programs (PAPs are programs created by pharmaceutical and medical supply manufacturers to help financially needy patients purchase necessary medications and supplies. Via these programs, prescription medications may be made available at no cost or at a minimal fee for individuals who do not have insurance or are underinsured. ” – payingforseniorcare.com
- The Supplemental Nutrition Assistance Program (SNAP) helps low income individuals buy food. Along with SNAP are multiple other programs across the USA that may be able to help. You can find what programs are in your area by visiting the BenefitsCheckUp.org website.
- Veterans Benefits should be taken advantage of if you are a veteran or a dependent or a spouse of a veteran. Check with your local VA office for information on what you may be eligible for.
- Begin looking into home care options just in case there comes a time when that service is needed. There are many affordable home care services that can help with basic needs such as bathing, dressing, and grooming.
- Multiple other programs available and what you are able to get depends on what you are eligible for and where you live. BenefitsCheckUp.org created a little questionnaire that you can fill out (no need to sign up) and it will give you lists of resources depending on what you are seeking help with. Check it out by clicking here.
- Grow your own food – if you have a green thumb and the space and physical capability to do so – growing your own food can certainly help to trim the grocery budget. If your parents are in good health, they can certainly tend to their own garden as well.
- Shop at the discount stores such as Aldi’s and if you shop at other stores, make sure to find out if they offer a senior discount.
- Check with your utility company to find out if and what types of discounts they can provide to your elderly parent. You may be surprised to find out that you can save some money by doing this. The same would be true for phone companies, cable companies, trash companies, etc.
- Check into the multiple services (hopefully in your area) that provide very low cost or free transportation for seniors. For all the information on this check out our article on Can Senior Citizens Get Free Rides?
- To save on caregiver costs use the resources within your own private community. That means siblings, family members, a close friend, your church, clubs, etc. Most people want to help but don’t know how so don’t be shy to ask. If your elderly parent requires someone to be with them 24/7, you could use someone to be with them 1 or 2 days a week – saving you the cost of the caregiver. It’s difficult to ask, I know but now is the time when YOU need the help. You can pay it forward in the future.
There are a variety of government programs available to help low income adults care for aging parents. The National Council on Aging is one such resource. Others include local government initiatives and community-based organizations. These programs can provide financial assistance, respite care, and other forms of support.
Government programs like Social Security and Medicare can help to cover some of the costs associated with aging, but they may not be enough. A reverse mortgage is one option that could provide additional income, but it’s important to understand how they work before making a decision.
There are a few different things that can be done for an older parent who has no money for medical care. One option is to look into free or low-cost clinics in the area. Another option is to see if there are any government assistance programs that can help with the cost of medical care.
Finally, it is also possible to set up a fundraiser to help cover the costs of medical care. No matter what option is chosen, it is important to make sure that the aging parent(s) are getting the care they need.
Speak with a financial advisor to learn more about whether a reverse mortgage is right for you.
Are Children Financially Responsible For Their Parents?
I do want you to be aware that in some US states and some countries, there are Filial Responsibility Laws. If you live in Puerto Rico or any of the states listed below, you may be responsible for your parents’ care. Although these laws are not often enforced – they still are the law so legally – you could be made to pay.
Filial responsibility laws (filial support laws, filial piety laws) are laws in the United States that impose a duty, usually upon adult children, for the support of their impoverished parents or other relatives. In some cases the duty is extended to other relatives.Wikipedia.org
There are currently 28 states plus Puerto Rico that have filial responsibility laws.
- New Hampshire
- New Jersey
- North Carolina
- North Dakota
- Puerto Rico
- Rhode Island
- South Dakota
- West Virginia
Other countries such as Germany, France, Taiwan and Singapore have their own versions of a Filial Responsibility Law as well.
These Filial Support Laws also may “…require adult children to pay for a deceased parent’s unpaid medical debts, such as those to hospitals or nursing homes, when the estate cannot.”Money.cnn.com
Am I Responsible For My Parents Debt When They Die?
Well, there may be some unique circumstances in certain cases but generally, you would only be responsible for someone’s debt if your name is also on the account.
The way it goes is that the estate is responsible for paying off any debt after someone dies.
If there isn’t enough monies in the estate to cover debts, then other assets are tapped. This could include monies left to their heirs so if you were to inherit some money, it may be that you end up inheriting less or none at all – depending on how much debt needed to be left to pay.
Now, having said that I will tell you that when my father passed away – he had no estate and about $60,000 of debt mostly in credit card bills. Although he was the only person on those credit card accounts – bill collectors kept contacting my family for months after he passed away trying to collect those funds.
So, yes we were not legally responsible but that didn’t stop them from trying.
I do recommend that you contact an elder law attorney about this issue and I would say to do it before your parents pass away. It will put your mind at ease and if any legal documents need to be prepared, you and your parent can work together to make that happen.
What happens to elderly with no family or money? – If an elderly person with no family or money is of diminished capacity and unable to make decisions and/or care for themselves then they are often made a ward of the state or county they are in. All matters concerning their care will be made by the state or county. Otherwise, elder orphans who can still care for themselves may go on welfare and receive aid from their local government.
We define elder orphans as aged, community-dwelling individuals who are socially and/or physically isolated, without an available known family member or designated surrogate or caregiver.U.S. National Library of Medicine
The National Council on Aging is a resource to help low income adults.
What are some alternatives to long term care? –
In-home care, adult day care, and assisted living communities are all possible alternatives to long term care for aging parents who have no money. Each option has its own set of pros and cons that should be considered before making a decision. In-home care is generally the most affordable option, but it can be difficult to find quality caregivers.
Adult day care can provide social and recreational activities, but it may be too expensive for some families. Assisted living communities offer a more comprehensive range of services, but they can be very costly. Ultimately, the best option for an aging parent will depend on their individual needs and preferences.
It’s difficult to see our parents age and become less independent. We want them to live long, happy lives with a good quality of life. But sometimes our parents don’t have the financial resources to make that happen.
I know it’s an extremely difficult situation to be in, to care for aging parents AND to deal with the lack of monies. But the good news is that there are some options available.
1. Medicaid can help cover the costs of long-term care for low-income seniors.
2. The Veterans Administration provides benefits and services to eligible veterans and their spouses, including health care, pension programs, and more.
3. There are also many nonprofit organizations that provide financial assistance, services, and support to seniors in need.
4. Finally, family and friends can pitch in to help care for aging parents who have no money.
No matter what the situation, there are always options available. So don’t despair if your aging parents have no money. There is help out there.