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Professional Financial Planning
Figuring Out the Present Financial Picture
 Current Income
 Current Expenses
 Insurance Coverage
 Net Worth
Financial Planning for Anticipated Elder Care
Are you Eligible for Benefits Covering Elder Care Services?
When You Are Not Eligible for Subsidized Services
Resources for Pension Issues
List of Important Documents

Making decisions about health, caregiving, and housing needs can be overwhelming, and the choices can be very costly. That is why it is a good idea if possible to do financial planning for future care needs of elders in the family. Decisions may need to be made, for example, about how to sell a house and finance an apartment, or whether to purchase long-term care insurance.

Caregivers should try to do financial planning for their own future needs as well. Many are themselves approaching or past age 60, and their ability to provide care for another, possibly including financial assistance, may depend on making changes to their own financial plan.

A good plan should include this information:

A monthly budget with income and expenses specified that allows you to calculate   expected cash flow.
A review of your health insurance plan(s) and what is covered.
An assessment of all your assets and your debt that allows you to calculate your net   worth.
Designation of someone to handle your finances and decision-making if you can't.

You might begin to think about these difficult financial and legal issues by talking with a professional financial planner, elder-law attorney or geriatric care specialist. A good place to find such expertise is your local ASAP (Aging Service Access Point) which can provide advice and also make referrals to fee-for-service financial planners. See Section 8, A Directory of MA Gateway Organizations: Finding Elder Care Services in Your Area.

For a checklist of questions to ask when interviewing a financial planner, if you decide to engage one, see the website Financial Planning Association which also provides a database of certified financial planners across the country.

In Massachusetts, you can go to the Massachusetts FPA chapter at FPAMA.ORG or call toll-free at 866-804-0484 to find a certified financial planner in the state. That website also has useful information about retirement planning.

To begin planning for yourself or the elder in your care, or to prepare for working with a financial planner, you will need to analyze "cash flow." This means calculating current income and expenses, including insurance coverage payments. You also need to have a fairly good idea of the value of major assets like your house in order to calculate overall "net worth" which is the current value of all your assets after you have subtracted all your debts. You might want to start this process by simply locating all important financial and legal records and documents. For help with this, use the worksheet List of Important Records.

A good working analysis of your basic financial situation should include the following information:

Personal income from pensions and other retirement benefit systems, such as 401Ks, including their required minimum distributions.

Personal income from annuities and investments such as mutual funds, stocks and bonds

Rental income

Income from public sources such as Social Security, SSI (Supplemental Security Income for aged blind and disabled people who have little or no income), and veteran's benefits.

If you have questions about Social Security issues, go to Social Security or you can call or visit your local Social Security office. Social Security has a toll-free number 800-772-1213 (TTY 800-325-0778). A list of regional offices can be found at Social Security-Boston, MA, or by calling the toll free numbers.

Rent or mortgage payments
Real estate taxes
Utilities and telephone
Uninsured medical bills
Insurance premiums
Clothing and other personal items
Gas, car maintenance, and other transportation expenses.

Long term care
Life insurance death benefits
Entitlement programs (i.e. Medicare/Medicaid and Veteran's benefits)
Prescription Advantage/Medicare D

Assets: including real estate, cash/CDs, stocks/mutual funds, deferred annuities, cash value of permanent life insurance.

Debt: including mortgages, credit cards, car payments, outstanding bills/loans.

It is also important to review beneficiary designations on any life insurance policies, annuity contracts and 401K/IRA accounts to make sure they are current and appropriate.

The website of the AARP, the American Association of Retired Persons, provides information and worksheets as PDFs that can be printed out to assist you with a variety of financial planning issues. They provide worksheets for monthly income and monthly expenses, semi-annual and annual expenses, as well as information on insurance, financial planning and retirement. Association of Retired Persons.

Once you have evaluated financial resources, the next step is to estimate care needed in the future. Obviously this calculation cannot be exact; neither the care needed nor the cost are fully knowable. But it is helpful to answer the following questions as well as you can and make some financial judgments in relation to probable needs for care.

What will the most likely health care and home care services cost?
What might prescriptions and medical equipment cost?
What does health insurance cover?
What will home modifications cost?
What resources are available to pay for needed services, and are we eligible for state or federal subsidized coverage?
Should we consider long-term care insurance?

For detailed information on long term care insurance, go to Mass.Gov and type "long term care insurance" in the search box at the top. Publications are available free as a PDF. Or call the Division of Insurance at 617-521-7777. You can also refer to the Health Care chapter for more information

For families who are working to balance the financial requirements of caring for older parents, as well as their children, and their own retirement needs, the American Institute of Certified Public Accountants offers some good information on their website, 360Financial Literacy Organization > Life Stages > Sandwich Generation.

To be able to quickly determine whether an elder meets eligibility requirements for services that are free or for fees based on income, a good starting point is doing a "benefits check up."

You can use a free, confidential and comprehensive online service that checks for federal, state and some local private and public benefits for older adults (ages 55 and over). It provides a detailed description of available programs and provides local contacts for additional information Benefits Check-Up Organization.

Generally, eligibility criteria for elder services are based on a combination of the following factors depending on the services needed:

Health status
Employment status
Veteran status
Health insurance
Household size

Many elders and caregivers find that they are not eligible for subsidized elder care services, but their budget is so tight that they cannot afford elder care services out of pocket. Many elders say that their home is their largest asset and believe that the only way they can access the value of it is by selling it something many do not want to do.

However, there is another option called a reverse mortgage. It may not be right for your family, but it is worth discussing with a financial planner. A reverse mortgage is special type of home loan that lets a homeowner convert a portion of the equity in his or her home into cash. The equity built up over years of home mortgage payments can be paid to you. But unlike a traditional home equity loan or second mortgage, no repayment is required until the borrower(s) no longer use the home as their principal residence. Here are two organizations that can help you learn more:

The U.S. Department of Housing and Urban Development (HUD) created one of the first reverse mortgage programs. HUD's Reverse Mortgage is a federally-insured private loan, and it is a safe plan that can give older Americans greater financial security. Go to Dept. of Housing & Urban Development > enter "reverse mortgage" in the search box > "Top 10 Things to Know if you are interested in a Reverse Mortgage."

American Association of Retired Persons (AARP) to receive additional information about reverse mortgages, call: 800-209-8085, toll-free.

If you need assistance with questions about pensions, The Pension Action Center, based at the University of Massachusetts/Boston's Gerontology Institute, offers two useful programs:

New England Pension Assistance Project (NEPAP) provides expert assistance to people having difficulties in locating and securing pension benefits from employers. NEPAP services are free of charge and are available to residents of New England New England Pension Assistance Project

National Pension Lawyers' Network (NPLN) is a no-cost referral service that connects workers and retirees with 640 attorneys in all 50 states and District of Columbia who can help them understand and enforce their pension rights. Lawyers from around the country represent workers, retirees, and their families in pension matters on a regular-fee, reduced-fee, and/or pro bono basis. New England Pension Assistance Project.

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