Your parents have always been there for you, but soon you might need to return the favor. Make sure your parents get the help they need, without sacrificing your retirement.
It can be difficult to watch your parents reach a stage of life where they need help, and just as difficult to figure out how you can offer it. Having a plan can make all the difference when you’re looking after two households.
Ask, and you could receive
Before you start footing their bills, make sure you’ve considered outside help. There is no shortage of programs designed to help the elderly:
- Housing Repair Program from the United States Department of Agriculture
- Credit for the Elderly and Disabled from the IRS
- Supplemental Security Income from the Social Security Administration
- Adult Protective Services from the Kentucky Cabinet for Health and Family Services
Insurance can make sure you’re getting your parents the care they need. Even if they can’t enroll in private insurance, programs like Medicare and Medicaid are available from the federal government. They cover a huge range of services and can provide help concurrently. If your parents don’t qualify, a life insurance policy could recover some out-of-pocket costs.
Life and taxes
If you do help in a more financially direct way, be aware of penalties. Up to $15,000 for a single parent, or $28,000 for a married couple, is all you can gift in a year without getting hit with taxes. If you are paying for more than half of your parent’s household expenses, you can claim them as dependents and may become eligible for tax breaks.
Ongoing estate of affairs
Be wary of signing anything that could become your responsibility once your parents pass. While the estate bears the burden of most debt, things like cosigning for your parents can leave you responsible for leftover bills.
Public systems, private help and a lot of planning can get you the answers to your worries. Keep your parents happy and healthy in their twilight years without paying a price that keeps you from enjoying yours.