Most of my friends, family and colleagues are going through the same thing my husband and I are, aging parents. Most are telling their parents not to conserve their money so they can pass it along to us after they die as an inheritance. But for many seniors the expectation of an inheritance is weighing heavy. But as we all know, they need to focus on themselves and NOT leaving us an inheritance.

As lifespans get longer, so does the potential for large health care bills. It’s commonly said that spending requirements decline as you age because you’re not travelling as much and spending less on things like clothes and entertainment. But you probably need a lot more money when you’re 90 than when you’re 75 because of health care issues.

A change in thinking about retirement planning may be required to accommodate late-in-life health care costs like a stay in an acute care facility, home care or the retrofitting of a house to address mobility issues. Long-term care insurance is one possible solution, but it’s a pricey addition to the many other financial obligations we have in our preretirement years – paying off the mortgage, topping up our retirement savings and helping our adult kids if they’re struggling to achieve financial independence.

Another option is to create a reserve savings fund of some sort that we don’t rely on for paying day-to-day expenses in retirement. Such a fund might be found in the money seniors are hoping to pass along to their children.

Health care bills will end up soaking up some of this money, though. Longer lives are one factor driving this reality; another is smaller families (ie. the informal, unpaid caregiver).

Something else to consider is that governments are increasingly putting an emphasis on seniors with health problems remaining in their home. This can put more of a cost burden on seniors than if they were in government-supported hospitals or similar facilities.

Inheritances, whether they’re cash gifts given by seniors while they’re alive or money set aside to pass along after death, may be needed to pay these health care bills. So be a little bit selfish, seniors. Put yourself first in using up your savings, and worry less about providing a legacy.

Critics of the reverse mortgage say the administration fees and interest rates are high, but if you look closely at these products, they can make sense for seniors in their early 80s or older who own a house, aren’t quite ready to sell and need cash. In particular, she finds that reverse mortgages make sense in cases where a parent would otherwise have to rely on money from kids to pay their health care costs.

It really is best for families if seniors are able to take care of themselves rather than be supported by their children. Does it make sense to potentially jeopardize the next generation’s retirement as well?

For more information on reverse mortgages, how they work, and how they might benefit you or your aging parents, give me a call for a free consultation – I always have time to answer your questions!