The cost of waiting — why financial planning for care can't be postponed

This article is for educational purposes only and does not constitute medical, legal, or financial advice. Every family situation is different, and you should consult with appropriate professionals about your specific circumstances.

You probably know this already. You know you should be planning. You know it would be smart to have conversations with your parent about finances and care before something forces the issue. And yet you're still putting it off. Maybe your parent isn't sick, so it feels premature. Maybe your parent doesn't want to talk about it, and avoiding conflict feels easier than insisting. Maybe you're drowning in your own life right now, and adding "elder care financial planning" to the list feels impossible.

Here's the problem with waiting: the cost of waiting is real, and it's often measured not just in money but in options. The choices available to your parent shrink with every year you delay. Some decisions that could have been made calmly and strategically become decisions that are made in crisis mode, with worse outcomes and more limited choices. Other protections that could have been put in place become unavailable once your parent's health or cognitive status changes.

You're not waiting because you don't care. You're waiting because planning is uncomfortable and uncertain and because your parent is still fine, probably, and it's easy to convince yourself there's still time.

There is still time. But time is also part of what you're spending.

Understanding Your Parent's Situation

Before you can plan, you need to know what you're actually planning for. This requires having some hard conversations and gathering real information, and it's much easier if you start when things are calm rather than waiting until there's a crisis.

Start with the basic question: what is your parent's financial situation? This means understanding income, assets, and obligations. Does your parent have a pension or retirement accounts? What's their Social Security income? Do they have savings, and if so, how much? What are their actual monthly expenses for housing, utilities, food, transportation, insurance, and healthcare? What debts do they carry? Is there a mortgage, car loan, or credit card debt?

This information is not optional. You can't plan anything without it. Many adult children avoid asking because it feels intrusive or because they don't want to embarrass their parent. But if your parent ever becomes incapacitated, you'll need to know this anyway. Getting it now, while you can ask, is far better than scrambling to figure it out later when your parent is hospitalized and you have three days to find their account information.

The conversation is easier if you frame it around care planning rather than around being nosy. "I want to understand what resources you have so that if something changes, I can help you without making it worse. Can you walk me through your finances?" Most parents will cooperate if they understand the purpose.

Next, understand your parent's preferences and their likely trajectory. If your parent is in generally good health, their timeline might be measured in years or decades. If your parent has a chronic illness or significant health problems, the timeline might be measured in months or a few years. Has your parent talked with their doctor about what to expect? What kind of care is your parent hoping to avoid, and what kind would they prefer? This is important because care preferences directly affect which care options will actually work for your parent and which financial strategies make sense.

Also assess your parent's ability to manage money and make decisions right now. Can they do it independently, or do they already need help? Are there signs that cognitive changes are beginning? Is managing finances becoming overwhelming or confusing to them? This matters because if your parent's capacity is declining or about to decline, certain legal documents and arrangements need to be in place while they can still execute them competently.

Setting Financial Goals

Once you understand where your parent is starting from, you can ask: where do they want to go, and what will it cost?

This is where you project your parent's care needs. There are different scenarios here. Best case: your parent stays healthy and independent, living at home, paying their own bills from their retirement income, and never needing significant outside help. In this scenario, the financial planning is relatively simple. Your parent needs enough income to cover their expenses, and ideally some cushion for unexpected costs. The question becomes: what happens to the money left over when your parent dies?

Middle scenario: your parent develops health problems that require some care, maybe in-home care for a few hours a week, or a move to an assisted living facility at some point. The costs go up significantly. In-home care, even part-time, costs $20 to $30 per hour. Assisted living costs $4,000 to $6,000 per month on average, depending on your region. Can your parent's assets and income cover this? For how long?

Worst case: your parent develops significant cognitive decline or physical decline that requires 24-hour care, either in home or in a facility. Skilled nursing facilities cost $8,000 to $12,000 per month. Long-term memory care costs $6,000 to $10,000 per month. If your parent ends up here and doesn't have the resources to pay for it, Medicaid becomes the payer. But Medicaid has strict rules about assets and income, and your parent needs to qualify.

You don't know which scenario will actually happen. What you know is the range of possibilities. Your financial planning needs to account for the likelihood of different outcomes and what resources your parent has to cover them.

Here's where people get stuck: they're planning for a scenario they hope won't happen. They're thinking, "Well, Mom is healthy now, so maybe she'll never need care." Maybe she won't. But you should still plan as if she will, because the cost of being wrong is catastrophic. If your parent stays healthy and never needs significant care, the money you saved for care can go to other purposes. If your parent needs significant care and you didn't plan for it, your parent and your family will suffer the consequences.

So the financial goal becomes this: make sure your parent has enough resources to pay for likely care scenarios without impoverishing themselves or becoming dependent on family members who can't afford to help.

Some families can fund this entirely from retirement savings and income. Some families will need long-term care insurance to bridge the gap. Some families will eventually need Medicaid. Most families need a combination approach: some assets or insurance to cover a period of care, with Medicaid as the fallback if care needs extend beyond what your parent's resources can cover. The specific strategy depends on your parent's age, health status, assets, income, and state of residence.

Building Your Strategy

This is where the professionals come in. You need a coordinated team: an elder law attorney, a financial advisor who specializes in elder care, and potentially an accountant. These are not optional luxuries. They're the professionals who understand the rules in your state, who can help you avoid costly mistakes, and who can structure your parent's affairs to protect both your parent and your family.

An elder law attorney helps with the legal documents that matter: power of attorney, healthcare directives, living will, and potentially a trust. These documents need to be created while your parent still has the legal capacity to execute them. If you wait until your parent is incapacitated, you'll be facing guardianship or conservatorship proceedings, which are expensive, slow, and give your parent less voice in what happens. Creating these documents now costs several hundred dollars and prevents much larger problems later.

The attorney also helps with your parent's estate plan. If your parent has a will, is it current, or does it reflect outdated wishes? Does your parent have property that should be held in a trust for tax or privacy purposes? If your parent is married and has significant assets, what happens to those assets if one spouse needs long-term care? These are strategic questions that have real financial consequences.

A financial advisor helps you run the numbers. If your parent has $300,000 in retirement savings and will spend $50,000 per year on housing and living expenses, will that last? For how long? When might your parent need to liquidate assets to cover care costs? What about taxes on that liquidation? If your parent buys long-term care insurance, which product makes sense, and what coverage level? If your parent is considering a reverse mortgage to fund care, what are the actual numbers?

An accountant helps with tax strategy. If your parent is going to be in a higher tax bracket in the future because of required minimum distributions from retirement accounts, or if your parent is going to need to liquidate assets for care, are there strategies to reduce the tax impact? If you're a caregiver for your parent, are there tax credits you can claim?

The strategy also accounts for state-specific rules. Medicaid rules are different in every state. Some states have more generous Medicaid rules for home and community-based services. Some states require long-term care insurance as part of their Medicaid planning. Some states allow certain asset protection strategies that other states don't. You can't plan properly without understanding your state's specific rules.

Taking Action Now

Here's the thing about planning: it doesn't mean you've decided anything final. It means you've thought through the options and made intentional choices while you still have time to change your mind. It means you've put legal documents in place while your parent is able to execute them competently. It means you've had conversations so that if something changes suddenly, you're not making decisions from complete ignorance.

Start now by scheduling that conversation with your parent. Not a huge, scary family meeting. A conversation. "I want to understand your financial situation and what you'd want if something changed. When would be a good time to talk about this?" Make it clear you're not trying to control their money or take over their life. You're trying to be a responsible adult who can help if needed.

Gather the information while your parent is willing to share it. Get access to account information. Write down passwords and account numbers. Document Social Security information and insurance policies. Make a list of assets and debts. This information, organized in one place, is invaluable if things change.

Talk with your parent about their wishes for care. If your parent developed significant memory loss, where would they want to live? Would they want to stay at home with caregivers, or would they prefer a residential facility? If your parent became very ill and wasn't likely to recover, what kind of care would they want? These conversations are uncomfortable, but they're far better to have now than to be guessing about later.

Then consult with the professionals. Get a will or trust in place. Execute power of attorney documents. Understand your parent's actual care costs and options. Make a realistic plan for funding care. If long-term care insurance makes sense, buy it now, while your parent is insurable. If Medicaid planning is necessary, start positioning assets now, understanding that some strategies require time to work properly.

The cost of waiting is real and compounds over time. Every year you delay is a year that long-term care insurance is more expensive or less likely to be available. Every year you delay is a year your parent gets older and more likely to develop health problems that make planning harder. Every year you delay is a year you have less time to move assets strategically if Medicaid might eventually be necessary.

But the bigger cost of waiting is this: if your parent becomes incapacitated before you've planned, you lose the chance to do this in a way that reflects what your parent wants. You're forced to guess. You're forced to work through legal systems to get the authority to make decisions. You're forced into crisis mode when the crisis arrives. Your parent loses voice and control.

The time to do this is now. Not in six months. Not when your parent gets sick. Now.

How To Help Your Elders is an educational resource. We do not provide medical, legal, or financial advice. The information in this article is general in nature and may not apply to your specific situation. If you are concerned about a loved one's cognitive health or safety, consult with their healthcare provider or contact your local Area Agency on Aging for guidance and support.