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Lean on us — the joy of caring for loved ones as they age

Being able to support their elders is the most important financial goal for many families — and that’s especially true for Hispanics/Latinos. These steps can help you prepare.

 

By Iván Rothkegel

 

I’M A U.S. CITIZEN OF CHILEAN DESCENT. Like most Hispanics, I primarily identify as American — except, I have to admit, when the Chilean men’s national soccer team plays the U.S. squad. But there’s one allegiance that, for me and many Hispanic people, supersedes nationality. That’s family.

 

It’s a key value in our culture, as it is in many others, to protect and care for parents, grandparents, even aunts and uncles. We saw this recently in my wife Ximena’s family. After her grandmother suffered a stroke that left her partly paralyzed, the family held a series of meetings. It was decided that my wife’s sister, who had a bigger place, would take her in. (At the time, her sister was also raising four kids, ages 6 to 15.) Everybody else would pitch in to help pay for a nurse and meet the other expenses. And we all took turns visiting to make sure Ximena’s grandmother was never by herself.

A grandfather and his granddaughter on a couch, smiling. Below them is a chart with caption, “Here’s what you might pay to accommodate their needs.” A list of prices and things one may do to care for their elders follows: “$82,500 Adding an in-law suite or separate apartment,” from HomeAdvisor, 2021; “$25,710 per year for 20 hours a week of home health aide (non-medical) (average hourly rates vary by state),” from Genworth Cost of Care Survey, 2021; “$18,250 Converting an area of your home into a bedroom and adding a bathroom,” from HomeAdvisor 2020; “$5,000 Installing a walk-in tub or shower,” from RetirementLiving.com, July 2021; “$1,900 Widening your doorway and installing an entrance ramp,” from RetirementLiving.com, July 2021.

So it came as no surprise to me that affluent Hispanic/Latino individuals are four times more likely than the general population to cite assisting aging parents as one of their most important financial goals. That’s what a recent in-depth study, “Diverse Viewpoints: Exploring Wealth in the Hispanic/Latino Community,” conducted by Merrill found. In total, according to research from AARP, 8 million — or about 17% — of family caregivers in the U.S. are Hispanic/Latino.6

 

“No one tells you that you have to take care of your parents. It’s just what we do,” says Kenneth Correa, a managing director and market executive at Merrill, whose mother — now 71 — emigrated from South America as a young widow to raise her son alone. Correa is now focused on providing her with a comfortable retirement.

 

“Providing financial support for your elders has major implications for saving, investing, budgeting, housing and more,” says Merrill Financial Advisor Sergio Mejía. “When you’re taking care of your parents and your own kids, the margin of error is often so small,” Correa adds. “That’s why planning is critical, and the sooner you can start the better.” Of course, that’s easier said than done, but it helps to begin with a roadmap. Working with an advisor, anyone who anticipates caring for elders as they age can begin to put a plan in place. Here are some steps you can take to get started:

 

Kenneth Correa headshot“No one tells you that you have to take care of your parents. It’s just what we do.”

— Kenneth Correa, a managing director and market executive at Merrill

Talk openly with family members

Use these four questions as a guide when you bring family members together to discuss how your parents or other aging family members want to be taken care of. Do it before anyone needs help, so that you can make thoughtful decisions, says Ben Storey, director, Retirement Research & Insights, Bank of America. Strongly encourage your parents to get a will and power of attorney if they don’t already have one, as well as a healthcare proxy to spell out who will make key financial and medical decisions if they can no longer do so themselves.

 

“And don’t assume both parents have the same idea,” says Storey. “Hear everyone out and try to find common ground.” In addition to the legal documents, he suggests setting down in writing everyone’s shared responsibilities — especially who’s on board to provide financial and physical care. Include a contingency plan in case the designated caregiver isn’t able to assume — or has to leave — the role.

 

Set savings goals and stick to them

“When you’re focused on immediate financial needs, like caring for your parents, you can end up diverting funding from your future,” Storey notes. To help avoid that risk, Mejía recommends setting up two separate portfolios — one for your own retirement, one for your parents’.

 

While both are critical, your own retirement should be considered the more important, he says. “If that means contributions to elder care funding are modest at first, that’s okay. You can attach different risk levels to the two portfolios, based on when you’ll need the money.” For instance, you might consider an investment strategy that’s a little more aggressive for the assets you set aside for your parents, he says.

 

Consider long-term housing needs

“Many Hispanic/Latino families prefer having elderly parents move in with them rather than entering a care facility. That can require a bigger house,” Storey notes, or elder-friendly renovations to an existing home, such as updating lighting, adding grab rails or creating a first-floor bedroom to limit the need to use stairs. He suggests asking yourself, “Will you able to renovate or purchase a larger home down the road?” Your advisor can help you prepare for the costs, he adds.

 

Ben Storey headshot“Many families prefer having elderly parents move in with them rather than entering a care facility. That can require a bigger house.”

— Ben Storey, director, Retirement Research & Insights, Bank of America

Looking after elders can put a disproportionate burden on women, who often wind up shouldering the bulk of in-home care, notes Cynthia Hutchins, director of financial gerontology at Bank of America. “Women sometimes wind up cutting back on work in order to manage elder care, which can affect their ability to advance in their career and save for retirement,” she notes. One answer for both men and women managing caregiving needs is hiring in-home help, but that can be expensive. Your local Area Agency on Aging, a non-profit that provides elder care resources and services, can also be very helpful.

 

To make in-home care more affordable, consider pooling your resources — which also alleviates the burden on one specific household, as was the case with my wife’s grandmother. Having siblings or cousins contribute a set amount to a joint account every month can be much easier than dividing expenses on a one-off basis, says Mejia. It can also save the designated bill-payer from having to go to everybody for a handout every time an invoice comes in.

 

While some families choose to have older relatives under the same roof, others may prefer providing them with a nearby house or apartment. That gives the parents a measure of independence while making it easier for you to help when needed. Make sure your parents or older relatives have a chance to express their preference. For example, my father, independent and happy with his pension at age 84, has decided he wants to live on his own as long as he can.

 

Treasure all the special moments

Above all, remember to treasure all the special moments that happen when aging family members are an integral part of your life. When I think about Hispanic/Latino families, I think about the weekly ritual many have maintained for generations: Sunday lunch at the parents’ or grandparents’ house. It’s a noisy gathering that includes siblings, everyone’s kids, aunts, uncles, cousins and so on. It’s also a deeply reassuring tradition and one that generally doesn’t end when one generation gets too old to host it. It simply shifts to someone else’s home — yours, or one of your siblings’, and maybe someday your own kids’.

 

Taking care of elders as they age is a continuation of that tradition in our culture. As Correa puts it, “Being able to help your elders is not just an obligation but a joy.”

 


Iván Rothkegel is a freelance writer and translator covering Latin American and business and finance issues at many publications, including The Wall Street Journal.

 

1 HomeAdvisor, 2021

2 Genworth Cost of Care Survey, 2021

3 HomeAdvisor, 2020

4 RetirementLiving.com, July 2021

5 RetirementLiving.com, July 2021

6 AARP, “Caregiving in the U.S. 2020,” May 14, 2020.

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