Taking Care Of A Elderly Family Member’s Health And Finances

Old Man SittingThe following is a guest post by reader Dave Scott who shares his experience of taking care of his 97 year old grandmother. I’m thoroughly impressed with Dave’s sense of duty and attitude throughout this entire article. You can tell he feels it’s an honor to take care of his grandmother and he’s looking for more insights on how to be a better caregiver. I’d like to have an open discussion during the holidays addressing the issues of cost, environment, emotions, responsibility and estate planning. 

It can be a great honor and a huge sense of responsibility to manage all the aspects of a aging family member’s affairs when they are in need of your help. For approximately 20 years, I have been managing my grandmother’s investment portfolio. All other aspects of her life were managed by her with a little bit of help from my father.

In late 2010, all that changed. At the age of 97, my grandmother needed to move into assisted living and was no longer capable of fully taking care of herself. During the same time period, her relationship with my father, her only living child, began to become strained and my father was battling his own health issues. As a result, I made the decision to move my grandmother from her current independent living home in Arizona to reside near me in Texas.

The responsibility dynamic changed, almost overnight, whereby I had just agreed to manage 98% of all of my grandmother’s affairs. I was definitely up for the challenge and thought I was the best suited to take it on. However, it doesn’t diminish the fact that this is not a trivial  undertaking.

Managing all aspects of a family members’ life

This is not about a ‘power grab’ to control all aspects of a family member’s life. For me, it is only about effective management. I approached this as just another offshoot of managing my own affairs. If you are going to effectively take on such a role, it is prudent that you do it in an all  inclusive, non piece meal, way. You are the quarterback for their team and, as such, you need  to ensure that their life is being managed to maximize their well being and quality of life.

When I  am referring to managing all aspects of their affairs, I mean everything from ensuring they have an ample amount of household supplies, to insurance, to utilities, to doctors, to dealing with management at their assisted living facility, to managing their investment portfolio. While it may be obvious, the most important thing is having someone that is willing and able to take on this role. Some family members may be willing but are clearly not capable. It takes a large amount of organization to ‘operationalize’ all the aspects of another person’s life. However, I have found  that once a good set of processes are established, everything generally runs on autopilot.

Managing the cash flow 

My main goal is to ensure that my grandmother will not outlive her assets and that she will maintain a healthy, active lifestyle. She is thriving in assisted living and I want to ensure that his remains for as long as possible. As such, I have paid careful attention to the balance between maximizing income and reducing expenses where feasible.

Lets start with income. As many of you know, assisted living can cost ~$5K/month or more (depending on the level of care needed and the location in the country). While my grandmother has a reasonably sized portfolio for her age, it doesn’t generate enough cash flow to only enable her to live off the dividends / interest without touching the principal.

I have structured her portfolio in a conservative manner so as to generate reasonable cash flow while ensuring it isn’t too negatively impacted by a market downturn. I try to keep her portfolio as simple and consolidated as possible through the use of only a few funds and ETFs. For example, Vanguard Wellesley Income Fund has worked well for her for many years. It provides a conservative balance of equities and bonds with a low expense ratio.

I was a bit concerned about her bond exposure earlier this year so I lightened up on any bonds that were too far out on the yield curve in favor of shorter term ETFs. While her portfolio was negatively impacted during this year’s downturn in bonds, it wasn’t enough to cause significant concerns. As you would expect, if you estimate an approximate 4% return on  a conservative portfolio and account for an average 7% increase in the annual cost of assisted living (and associated expenses), it doesn’t take too long to identify when the portfolio will be exhausted.

It is a bit scary to think that the seniors in our society who are fortunate enough to live to be 80+ and live in assisted living are still confronted with the possibility of outliving their nest egg in their final years. One aspect of maximizing her income that I gathered information, but didn’t pursue, was the option of having my grandmother take advantage of spousal veterans benefits.

The government currently doesn’t have a look back period on veterans benefits unlike Medicaid which does have a 5 year look back period. Your loved one could theoretically gift away all of their assets today and apply for veterans benefits tomorrow with no impact on the amount they would receive as a result of their recent gifting.

While there are a lot of people that have taken this route to curb the costs of assisted living, and there is pending legislation in congress to close this loophole and implement a look back period on VA benefits, it just wasn’t the right course of action for my grandmother at this time.

From the expense side, there are several things that can be done to minimize unnecessary expenses. This is an iterative process as your loved ones needs change or circumstances change.

Note: In order to be eligible to receive Medicaid coverage while in a nursing home, an individual can have no more than $14,400 in countable resources. Certain assets, such as the home and retirement accounts, may be exempt in some circumstances. The idea is to give away your assets to loved ones to qualify for government assistance before the five-year look back period begins, or else you will be disqualified. 

A few expense reductions  I implemented are:

1. Evaluate Medicare Prescription Drug Plan (PDP) options on an annual basis – identify if there is a more cost effective plan in my area based on the latest medications that my grandmother is taking.

2. Purchase grandma a big button cell phone with a basic $10/month plan – tether it toher wheelchair so that she is always available for a call. Cancelled her land line thus saving her $20-$40/month in unnecessary phone costs.

3. Eliminate all monetary gifting to family members – this one could be a bit more controversial. My grandmother has always been very generous to her family during birthdays & holidays. However, this was adding up to be several thousand dollars per year that could be used for her care. Therefore, I set the expectation with the family through a message that started something like this: “I think we would all agree that grandma’s assets should be, first and foremost, used to benefit grandma….”. Everyone agreed and there has been no discussion since.

4. Negotiate with Assisted Living – this is not always effective but I try to have the assisted living facility reduce the annual increase as much as possible. If I can get them to reduce the increase from 7% to 5%, that can make a marked impact.

Maintaining Your Loved Ones Quality of Life for as Long as Possible 

When deciding on a location of an assisted living home, there are the expected tradeoffs of  location, quality and cost. For my grandmother’s situation, I wanted her to be close to me  such that I could be seen a lot. I wanted to get to know the staff and the daily workings of my  grandmother’s assisted living facility. I have found that this is invaluable when first taking on such an endeavor.

Just as no one cares about your money more than you, no one cares about your loved one more than you. Therefore, if you are visible and the staff knows you, you can get a lot done, immediately course correct if something is not to your liking, and ensure that your family member’s quality of care is maximized. I was fortunate as the assisted living facility close to my home has a great reputation for quality.

One key aspect of quality that you can look for is how long has the staff worked there. In the case of my grandmother’s place, the same  management team has been together for 15+ years. This demonstrates a continuity of care and  dedication that I think is critical. In the short term, I was willing to tradeoff the slightly higher cost of this facility in favor of its great reputation and location.

A practice run for retirement

If you are fortunate enough to have the experience of caring for all the aspects of a loved one’s affairs, it will give you a new appreciation for what we all will face when we hopefully are there as well. For me, I feel like this is a practice run for when I retire and certainly a reality check on the costs associated with maintaining a balanced, high quality of life. In hindsight, we probably should have established some type of long term care insurance for my grandmother years ago. While it wouldn’t have addressed all the cost concerns, it would probably have helped to alleviate some of them.

There are other financial options that I continue to explore in the event that her health deteriorates and she needs skilled nursing care.

The changing role of grandchildren in caring for aging grandparents

In the past few years, I have been fortunate to have the opportunity to deepen my relationship with my grandmother. If it wasn’t for a set of unique circumstances, I may never have been given this opportunity – and for that, I am grateful. My situation has enabled me to reflect on the possibility that grandchildren may play an increasing role in helping to manage their grandparents affairs in the future.

Besides the opportunity to deepen your relationship with your grandparent, the relationship is different than a parent/child relationship, and thus may be better suited, for these types of situations. Grandchildren don’t carry the same ‘baggage’ that children do when dealing with an aging parent. In my experience, where my grandmother may have given more pushback to my father in a decision he may have made on her behalf, she doesn’t question me, her grandson, in the decisions that I make on her behalf (well, maybe she  questions me sometimes).

Once my grandmother realized that I had everything under control, she was willing to let go and enjoy her days without worrying about the details.

Readers: Have you experienced a similar situation with a loved one? How have you addressed some of the issues highlighted above? How do you plan to deal with the cost of rising assisted living costs? What about having your parents or grandparents live with you when they need help and hiring a full-time caretaker? Is it all our duties to take care of our relatives when they cannot? Who takes care of you if you don’t have children?

Note: If you’re looking for new content written by me today, I wrote a post entitled, “Startups Can And Will Make You Rich! Meet Buffer” on Untemplater.com. 

Sam started Financial Samurai in 2009 during the depths of the financial crisis as a way to make sense of chaos. After 13 years working on Wall Street, Sam decided to retire in 2012 to utilize everything he learned in business school to focus on online entrepreneurship. Sam focuses on helping readers build more income in real estate, investing, entrepreneurship, and alternative investments in order to achieve financial independence sooner, rather than later.

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  1. says


    I find it very admirable that you’re the one taking care of your grandmother and not your father or his brothers or sisters. I’ve always had it in my mind that children should take care of their parents, and never really considered the duty to fall upon the grandchildren. Do you have brothers and sisters? If so, what are their thoughts about taking care of grandmother?

    You make a terrific point about grandkids not have the “baggage” that comes along with taking care of their grandparents that their children do. I see this point completely!

    I like your four steps to expense reductions. What about having a candid one-on-one conversation with grandma to tell her about her financial situation? I’ve found clarity to be very appreciative among loved ones, especially if you are the one caring for them.



    • Dave says

      Thanks for the comments and for providing the opportunity to share with the community. My father is my grandmother’s only living child (my father’s sister passed away in her 20s back in 1975). My father is battling his own health issues so that is why it made the most sense for me to take over the responsibility. I do have 2 siblings (and 2 first cousins) that are very appreciative that our grandmother is close to me. I share a lot with my grandmother on her financial situation but it is a delicate balance – while my grandmother is very sharp, she does possess a certain level of forgetfulness that comes with this age. As a result, I try to moderate how much detail I provide her as she will often forget or easily get confused if I provide too much.

        • Dave says

          Yes, I have total say in her estate plan. However, there is not much that has changed for quite some time – my father and I are both executors to her revocable trust which has been established for over 30 years. She has all the proper documents in place including POA, Healthcare POA, and Advance Directive to ensure all her wishes are known. I am her POA and Healthcare POA. I didn’t fully appreciate the comfort of having all these documents properly in place until recently. 2 weeks ago, she was hospitalized for 1 week – she is fine now. When a 100 year old is in the ICU, you are immediately confronted with the worst case scenario possibilities by medical staff. It gave me a great sense of relief to know her exact wishes and have all the documents to support.

  2. Michael says

    Very interesting article. I’m in a similar situation in that I help a retired family member manage their finances. I find myself quite risk-averse in dealing with those accounts and its been tough in this low interest rate environment. I’d be curious about what others are doing in the same situation?

    I think taking care of older family members is one of the best things someone can do. We owe them a lot!

  3. Insourcelife says

    This is one subject most of us will have to become comfortable with as our parents age. My mom is still working but we already set up a system where I have access to all of her accounts and manage most financial matters for her. I think starting the process this early gets you in a better position to gradually ramp up assistance down the line without any surprises. Not all parents might want this, of course, but I found that my mom is more than happy to have someone help her to prepare for the years where she stops working. I would suggest sitting down with your parents to talk about this sensitive subject sooner rather than later.

  4. says

    I recently went through this to a point. I have been working with my father for over ten years and he has always run the business. It got to a point where he wasn’t doing much work and I needed to take over. He did not save much and could not retire either. We sell real estate as listings and fix and flips. I figured out a way to buy him out with a long term plan that provided retirement for him, I took over all his clients, he can still work some but doe snot have the stress of running everything. it has equaled more money for me, more security for him and less stress for all of us.

  5. says

    Thanks for sharing your experience. We’ll have to take care of my parents when they are older. My grandparents are all gone so we don’t really have the long lived genes.
    My mom took care of her mom when she was sick and it was really stressful. She’ll probably live with us until she really need professional care. We’ll see how it goes.

  6. Nate says

    I think we all do have a responsibility to take care for our relatives during that, “season of life”. It’s interesting that we even have to ask that question in the US… lol! Really… When you think about it… What a silly question [*thinks — what a first world problem that we have the time and luxury of deciding if it’s our responsibility to care for relatives when they need us*].

    I think there are ways to balance duties (maybe one family member lives with mom for half the year and then other relative the last half etc.)… The whole situation requires lots of communication for sure. We have been doing something similar with my grandfather (92 years old) for the past several years. He spends 25% of his time between each of his kids (including my mother).

    I commend you Dave!! You are being very honorable in caring for your grandmother with excellence. Well done.

  7. says

    Since I am one of the older bloggers, I experienced this first hand. My Mom was in a assisted living facility for years, She initially went in at the lowest (independent, but lived there) level. She went in in her late 80’s and slowly moved up to almost highest level of care. I managed her finances for close to 20 years. Beyond the finances and it is expensive for assisted living, it is tough emotionally to watch a parent deteriorate. The last few years, I am unsure if she knew who my wife and I were. She died in 2005 of old age. She was 3 weeks short of 99 years old.

    • Dave says

      Given her age when she passed, was your mother at risk of outliving her assets in assisted living? If yes, what type of planning did you implement to accommodate the situation? Although my grandmother is now 100 (she was 97 in 2010), my cash-flow estimates identify that she will probably exhaust her assets in approx. 6-7 years. While living to 106-107 is rare, it still concerns me.


      • says

        My mother was a lifelong saver and had sufficient assets to go 5 or 6 more years. It was good early planning, but for the last few years she no longer could enjoy it. This experience motivated me to get Long Term Care insurance for my wife and myself. The best part is I do not have to go into a facility to use it. I prefer to remain at home as long as possible.

  8. says

    Good for you Dave for being so conscientious. I often wonder how much longer my mother will be able to live on her own. She is 87 years old and has problems with osteoporosis. She luckily still has her full mental faculties. She currently lives in a trailer park about a half hour away from us.

    • Dave says

      Yes, it is tough to know how much longer our family members can live on their own. Hindsight being 20/20, I think that we probably should have put my grandmother in assisted living approx. 1-2 years before she actually went. In my grandmother’s case, she took a fall back in 2010 – this immediately predicated me hiring 24/7 in-home care for 3-4 weeks until I could get her into an assisted living facility. At the time of her fall, my grandmother was in Independent Living. However, there are distinct differences as to the obligations of the Independent Living facility (vs. Assisted Living) when it comes to what they are willing to do for your family member. Whether it is Assisted Living or another option, I recommend erring on the side of caution and have them make a change sooner than you think is absolutely necessary. This will avoid having to react to an urgent situation such as experienced back in 2010.

  9. Dave says

    Yes, it is tough to know how much longer our family members can live on their own. Hindsight being 20/20, I think that we probably should have put my grandmother in assisted living approx. 1-2 years before she actually went. In my grandmother’s case, she took a fall back in 2010 – this immediately predicated me hiring 24/7 in-home care for 3-4 weeks until I could get her into an assisted living facility. At the time of her fall, my grandmother was in Independent Living. However, there are distinct differences as to the obligations of the Independent Living facility (vs. Assisted Living) when it comes to what they are willing to do for your family member. Whether it is Assisted Living or another option, I recommend erring on the side of caution and have them make a change sooner than you think is absolutely necessary. This will avoid having to react to an urgent situation such as experienced back in 2010.

  10. says

    Thank you for sharing your experience Scott. This is a difficult situation to find your self in when you’re parents age. When you are young they help you, when they are old you help them. It is one of life’s treats and cycle of “If you scratch my back I’ll scratch yours”. In your story Dave you have really gone the extra yards to improve the quality of life for your Grandma, hats of to you Sir!

  11. Angie says

    Wow! very interesting. I too am taking care of my Grandma who is now 100 years old I have been living with her for over 20 years now. Never thought in a million years I would still be living with her. I also work with children with special needs. So I’m pretty worn out at the end of the day. We have 2 home caregivers who come during the day to watch her and two family member including myself So she has to have 24 hour care. The only thing is she sleeps most of the day. So when I get home I have to do most of the work. She is dishing a lot of money out every month, For help that she really don’t need until I get home. My parents are getting up in age also. and I tell them all the time to save their money because they are going to need every penny So that I can take care of them. Because I don’t make enough money to take care of my own self. Guess I have to cross that bridge when I get to it! I feel that the goverment really needs to do better in helping people who want to take care of there love ones at home.

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