Generally speaking, if you have kids, you have someone to watch over you beyond your golden years. Not everyone has children, though, and if you don’t, it’s up to you to prepare for your own senior care. And it’s important to plan now.
It’s not like having a child automatically guarantees you’ll be taken care of in your old age, but it’s common for adult children to take care of elderly parents. If you don’t have children, you have to be more prepared to figure it out on your own, and here are the basics of what you should have in place.
Find Someone You Trust to Oversee Your Health
More than money, you’re probably concerned with health care as you age. Who will make sure you’re taken care of? Who will make medical decisions for you when you can’t make them on your own?
Health care directives make sure you have clear answers to those questions, and they’re important to set up now, even if you’re young and healthy. They consist of two basic things: a living will and a health care proxy.
A living will establishes what kind of medical care you want to receive under certain conditions. It includes requests to withdraw life-support and any other care that’s only serving to prolong the process of your dying. FindLaw has an example of a living will that gives an idea of what it includes.
Living will guidelines vary by state, but there are online tools that can walk you through the process. For example, LegalZoom breaks it down into three simple steps here.
Your living will also includes a health care proxy, or a medical power of attorney. This is someone who will make decisions about your medical care that aren’t covered in your living will. They also have to keep tabs on your mental and physical health, and they’re the ones who decide when it’s time for you to change living arrangements and move into an eldercare home. If you don’t have kids, you might consider a spouse or a partner, but things don’t always work out so neatly. You may be divorced in your senior years, or you may outlive your spouse. So it’s important to designate a backup just in case, and you want to update your directives accordingly.
When you don’t have children, it can be tough to find someone to fill that role. Ideally, you have a trusted friend or relative you can enlist, but if you don’t, there are options. For example, if you set up a trust with an institution for your finances, you could write it so that they monitor your physical and mental health, too. It sounds kind of iffy, but Kiplinger explains how the process works:
The document, for instance, could advise the trust company to hire a geriatric care manager to conduct periodic evaluations in the future, and to send a copy of the assessment to the person you choose as your
health care
agent.
A big plus for going the bank route: “The chances of elder abuse are reduced if you name an institutional trustee,” Shenkman says. “The vast majority of elder abuse is committed by family members.
Or you might appoint an attorney to act as your health care proxy. U.S. News suggests:
If no one comes to mind, hire an attorney who specializes in
elder care law
by asking around for recommendations or searching online for highly rated professionals. Unlike your friends, they have a license to defend and are well-versed in elder care issues. Most of the time, Rahl’s found, “they’re trustworthy and will do a good job for you.
Again, when you go through an institution or a lawyer, you want to make sure you find a reputable one. The National Academy of Elder Law Attorneys has their own database of lawyers who specialize in elder law and special needs law.
Figure Out Who Will Handle Your Finances
A power of attorney is a crucial part of estate planning. Most people think estate planning is reserved for the elderly, but as we’ve told you before, it’s never too soon to get started. A power of attorney is the person who will manage your finances, including any legal issues, bills, or taxes, once you’re unable to deal with these on your own. Obviously, this should be someone you trust. If you don’t have kids, you might appoint another close family member or friend—perhaps a spouse, niece, nephew, cousin, or sibling. If that’s not an option, here’s what Kiplinger suggests:
If you do not have someone reliable...you could set up a revocable trust and assign a bank or trust company as trustee, says Martin Shenkman, an estate-planning lawyer in Paramus, N.J. You would move your assets to the trust, and the company would eventually take on financial tasks you assign to it, including paying bills and caregivers, processing medical claims, and overseeing your home if you’re hospitalized or in a nursing facility.
They add that it’s important to come up with a system for checks and balances, whether you assign a person or a bank to take care of your finances. This might mean asking your power of attorney to send monthly statements to an accountant, for example. The idea is simply to ensure there’s transparency so everyone involved in handling your finances knows what’s going on and acts in your best interest.
There are a handful of different types of power of attorney, but most experts recommend a “durable” power of attorney. It’s valid from the time you sign the documents until you die, and it’s easy to set one up yourself. RocketLawyer helps you get started with the right form, depending on your state. You spell out specific details about when this person has control over your finances, too. If you plan to designate an institution to take care of your finances, you should consult with an estate or trust attorney in those situations. The American Association of Individual Investors has a few recommendations to help you find a reputable estate lawyer.
You can change your power of attorney, too, as your life goes on. Maybe you do end up having kids— you can always revoke your old document and create a new one.
Write a Will to Protect Your Assets and Last Wishes
If you don’t have kids and you don’t have much money, you might not think you need a will and testament. But a will doesn’t just establish who gets your stuff when you die. It also designates who will carry out your last wishes, become guardian of any pets, and generally deal with all the stuff you leave behind.
If you don’t have a lot of assets or property, you probably just need a simple will, and you can draft a basic one using tools like Willing, LegalZoom, or, RocketLawyer. You’ll detail your wishes, name any beneficiaries (the people who get your stuff), and designate an executor (the person who carries out your will). If you don’t have children, this should be someone you trust or, again, a third-party institution, like a bank. If you have a partner or you’re married, you might create a “sweetheart will” with your spouse. This basically leaves everything to each other, but then also outlines what happens to your property and assets after both of you pass. A free tool like Willing can help you take care of it all and guide you through the process.
You’ll print out your will, get a couple of witnesses to sign it, then keep it somewhere safe (and tell your executor where it is). According to legal site Nolo, this is really all you need to do to create a legally-binding will.
Prepare for the Massive Cost of Long-Term Care
When most people think about saving for retirement, they think relaxation. You save to buy a beach h or fund your leisurely lunches. In reality, you’ll use your retirement savings to pay for less attractive things like health care costs.
And senior care (better known as long-term care) is expensive. You can see how the costs vary by state here, but in general, you can expect to pay thousands per month. On average, the cost of an assisted living facility is $3,293 per month, according to the U.S. Department of Health and Human Services. A nursing home, which provides even more care, costs $6,235 per month, or nearly $75,000 a year. Even if you’re not in a facility, the average costs for long-term care can add up:
$21 per hour for a home health aide
$19 per hour for
homemaker
services
$67 per day for services in an adult day health care center
An adult child might have the resources to help out an aging parent with these costs. When you don’t have children, that’s one less safety net. Your standard health insurance won’t cover long-term care, whether it’s a nursing home or a home health care worker, and Medicare and Medicaid can be limiting.
if you can’t afford long-term care on your own and you don’t qualify for Medicare, you may need long-term care insurance. This works like any other insurance policy—you pay a premium and it ensures you’re covered when you need assisted living. It comes with a heavy premium, though, at a few thousand bucks a year, depending on your age. So you want to fully consider other options, like saving early on in a Health Savings Account.
Long-term care insurance has its share of critics, but, in some cases, it’s the best option. If you don’t have a ton of cash to pay for the massive cost of long-term care every year, and you don’t qualify for Medicaid, most experts agree the insurance is worth it.
You can check to see if your employer offers this option (and many do, at a group discount). Like life insurance, you sign up through your employer, but your policy is typically still valid if you quit or retire. You can also look for options on the American Association for Long-Term Care Insurance (AALTCI) database, which lists companies to start your search. Shopping for long-term care insurance is a post all on its own, but the AALTCI, in general, is a solid resource for navigating the process once you’re ready to get started. With any insurance policy, you want to read your explanation of benefits and make sure you know what’s covered.
Your options will vary, but the bottom line is: the earlier you factor this massive cost into your retirement plan, the better. This goes for all of us, but it’s especially crucial if you don’t have children because you have fewer options to rely on.
Find a Convenient Place to Live and Establish a Support System
You also want to consider your geographic location. For example, the New York Times profiled one single woman preparing for her own senior years without children:
So she has planned, meticulously. A federal retiree now in state government, she moved to New York specifically because it offered good public transit, inexpensive cultural activities and good health care. “I wouldn’t want to be in the suburbs or out in the country if I couldn’t drive,” she explained.
The Milken Institute Center for the Future of Aging curates a list of communities around the country that they deem to be “the best cities for successful aging.” You can see how individual cities and metro areas rank, too. To come up with their list, they consider hospitals that offer geriatric services, nearby senior housing options, transportation convenience, and more. You can check out their full methodology here.
Wherever you live, you’ll want to ensure you have a solid support team of friends, neighbors, and loved ones to help you out as you age. That takes time, of course, but logistically, you at least want to have a group of people in place to handle your finances and health care directives. Specifically, experts suggest at least having an accountant, a financial planner, and an estate-planning (or elder law) lawyer working for you.
You also want your support team to know when it’s time for you to hire a healthcare worker or move into an assisted living community. Sadly, sometimes these things happen on their own—an elderly person gets lost or has an accident at home and a loved one realizes it’s time to establish more hands-on care. It’s important to communicate with your support system at what point you want to take on that level of care as you age.
When you’re young, none of this seems like a priority. Even if you have adult children, it helps to prepare for these years as much as possible, though, because it can be a heavy burden to bear. When you don’t have kids, it’s even more crucial to understand exactly what should be in place to prepare for your senior years.
Illustration by Sam Woolley.