Should You be Saving For Your Parents' Long Term Care? with Lily Vittayarukskul

We're looking at how in real life does this impact me and how can I take best practices to prepare for it, whether I have the financial stability in order to prepare, or I have to look at just preparing mentally or time wise.

are definitely due for another one. But you know us, we got to go to the experts, and Lily is absolutely that so We're glad you selected this topic today that you already kind of know what you're getting yourself into if you clicked yes on listening to this episode, glad that you're here, and I can almost guarantee you will walk away with something really helpful, depending on whatever stage you're in and thinking and planning it for.

and all three friend letters next week. So if you want to have a direct role in shaping what we talk about, who we work with, and what we offer over the next year. Then head to Frugal Friends podcast dot com get the friend letter and you will see the link to the survey in the friend letter to the MEGA survey in the friend letter. They're literally all multiple choice. This won't take a ton of your time, but will be extremely helpful in how we plan where to invest our time over the next year.

So there's there's all of these barriers and not talking about it, just like anything with money, but specifically this has a direct impact on our lives and our finances. And this specifically has a big impact on our lives and even how we make money. My mom, when she was taking care of my grandmother and her end of life, was actually fired from her job because she was taking too much time off caregiving for my grandmother. And so this has been a topic I have been super passionate about.

And she was not able to save for her own retirement because of saving of spending so much time and money on my grandmother's caregiving, you know, aside from other things. But this is such an important topic. You already know that if you're listening to it. But so we are bringing on Lily Vy to Reskul to talk about all of the ways that there are to plan for long term care, and so we're not just we're not talking about your parents' retirement in this one, where we may

have been talking about that in the last one. This is specifically they're closer to end of life care, and so I think this is the most important one. She sheds a lot of light on things that we may take for granted, covering these things, but also a lot of resources that if you're going to be somebody who's the physical caregiver for your parent to be aware of. We've got a link to more in the show notes.

But Lily is a certifiable genius. She started college at fourteen, collaborated with NASA at sixteen, and she founded her company water Lily after a personal experience with a long term

care event in her family. And so this experience, combined with her data science degree from UC Berkeley and decade in healthcare, is what led her to create water Lily, which is this AI program where you can put in different aspects of your life, your finances, your parents' life finances, all of these things, and it will create kind of like this template, not like rule, but like plan that you can start thinking about, like this is theoretically how much money I will have to save or have to

have this amount of care? Where's the high approach? Like if I'm going to put in more physical hours, how much less do I have to say? It's a really cool program that I got to test out when I was at fin Con last year, and it's and Lily's amazing water. Lily is amazing and right now you can get on the wait list for it. Right now, it's

only available to certain financial planning professionals. But Lily is a wealth of knowledge that we wanted to bring on to just start to talk about, to reintroduce some of these topics.

We had to do a ton of research on just like you know, how to take care for you know, Doctors weren't giving us, you know, all the instructions that we needed as well, and it was a lot more expensive than we expected, and we spent a lot of money out of pocket that was not covered by you know, our health insurance at all, which is like a surprise since most people make the assumption like, oh health there, my health insurance is going to cover know everything, And

probably the most impactful reason why, you know, I started a company around this topic and trying to help families have better outcomes here by planning is because of the lack of emotional and psychological, psychological preparation on this topic. And usually when you're in the thick of it, you're on all this like physical work, the financial, uh, you know,

burden as well. It is also the lack of aligned perspectives on you know, how should we be delivering care to like let's say my aging parents, or how that person may want care and if anything, they're probably scared psychologically they never thought about it, and so you know, that's where a lot of you know, additional conflicts arrive and you have a lot of fights and it really

strains a relationship. And so a lot of it is just this shock of all these things coming at you and the lack of resources you have at that time. And so that's why planning ahead of time is really important to address those pieces.

was not your personal experience. And so when we even say like start early on in your mind, what does that mean, Like how early on are we talking? Should we be thinking about long term care for family members or maybe ourselves.

this topic. And so what they do is they try to bring up the topic with any of their clients when they're in their forties or sixties, because that's really the optimal time where you know, you have a plan for your children, if you're having any if you have any children, about helping them go to college. You're at a point in which you know you've kind of hit the stride in your career where you actually have quite a bit of wealth and you're trying to figure out

how to you strategically distribute it. And your parents are getting older, you know as well, and so that might be more of a top of mind topic. So for a client themselves, we usually see them plan on behalf of themselves, like forties to sixties is the best practices.

But in terms of on behalf of their aging parents, if they're not interested in doing it for themselves, their parents are definitely you know, on the precipice of needing care over the next like five to fifteen years, and given how expensive it is, we might want to start to strategically think about like are we going to financially

support them or do they have enough? And even if they have enough, like are they aware of like how to use those financial resources to kind of get the care resources you know they're looking for as well.

because of the lack of knowledge about it. But if you do put in some planning and at least prepare yourself, even if you can't prepare fine financially, but you're just preparing yourself with knowledge, it takes a little bit of the burden off anything you can do. And I think it's a scary topic that we don't want to learn about because it makes it too too real. But like, so, what are some of the things that we should know about, like long term care if for our parents or for us,

like costs, like anything? What are what are you trying to What do you think is the most important things that people should know and be educated on.

then supporting them like throughout their life, like what are some resources they need. It's a or you might have like pets, or you might have really good friends where they've been in a pickle or they've gotten surgery and

you've taken care of them. So I think that a lot of us have at least like one experience of taking care of another person, whether it's like a sibling, family member, or friend or you know, an animal, and in that sense, you kind of intuitively understand like what does it take for you know, to sustainably take care of someone or something, And then like kind of like

leading into that a little bit more. It's like when it comes to taking care of our aging parents are thinking about it on behalf of our them, of ourselves. That's where I have the same three pillars, uh, you know,

to focus on, which is like the financial piece. Big one is a lot of people assume that Medicare is going to cover everything when I turn sixty five and then when I grow older, like I have free Medicare, and I could always buy you know, supplemental plans on top of that, and the supplemental plans on top of it.

Let's just like most people don't know how expensive that is, you know, to actually buy those health plans and even and then if you were to, you know, have like issues with basic things that keep you independent, whether it's like doing your laundry or walking your like walking around, or having mobility issues. Essentially because you've grown older and your body physically is like more like frail, then that's

where you know, getting help. There is not exactly medical care, and there are some caveats of like you know, if something happened like you fell down, you broke a hip, then you went to the hospital and you were there for a certain period of time, and then you get rehab after that that is covered, but only up to last time I checked, only up to like one hundred days, and then the rest of that time that you need, especially if it's not a permanent disability, you now have

to pay for that out of pocket, whether you know, either your family is like you know, paying for it by teaing care of you, by like you know, living near you or living like at the house and helping you physically since you have a disability that you can be independent or you have to pay for what's called a professional caregiver to help you know, physically take care of you. And I know that in addition to that, when you grow older, you might also have cognitive issues

as well. Where you thought I can manage my money up until the point in which, like you know, I pass, and that's just like not true. You might have cognitive issues that might make you a liability to even your

like financial assets as well. So learning you know, who do you trust with your assets that like might be your like a really good friend that's younger than you, or you know, your daughter or your son, or when you cognitively can't make decisions for yourself like anymore about like you know, the type of care that you actually want to receive. I want to age at home, or I'm open to going into, like you know, a community

where I want to socialize more. Having someone else know those preferences ahead of time and you name them legally as a proxy for you to make those decisions is actually really key to kind of getting the quality of life that you're still looking for and aging in a really dignified, you know, way as like some light things so lightly touched on, like like physical, financial, like emotional, like psychological stuff.

effectively try to bring up the conversation. And I look at it from ultimately foundationally from like care hours and care span perspective, meaning like, you know, can we get a sense of like how much hours of care are you going to like need you know overall, and we estimate that as well as you know, how long are you going to have like you know your care needs you know for so under that like foundation of just like okay, looking at it from like how many hours

of cararaine get a need for like what period of time? Then we could break that down into like the level of care needs. There's three levels of care needs that we break it down into, which is like you know activities, Like there's this concept of you know, activities of daily living, meaning you know, activities that you need to be able

to do to be considered independent. So things like being able to, uh, you know, go, being able to walk across the room, being able to get out of the bed, being able to go to the bathroom by yourself, take a shower by yourself, like things that we intuitally know is like really hard to do if we ever had a knee surgery or something else where we have like

mobility issues. And so there's about six of those activities of daily living and so for us, we break down care needs in terms of like, okay, like if you wanted to you know activity like you know eighty, I call them, like I guess name is like ADLs, Like if you want to do adeos, I call that early

care phase. And what's really important about calling it that way is because or breaking it down in that structure is because different you know, environments where you want to age, whether it's aging at home or going to a community center or even thinking about nursing home they have different requirements for the level of care need that you have, and so I break it down into like one to two activities a daily living you have like issues with like one to two of them, or three to four

or five to six. That's how you cleanly understand just like different environments that fit those care needs. And on top of that, like those different care structures where they're like aging at home or going into like some sort of community or facility center have different payment structures as well. So if you age at home, I think about it from an hourly cost perspective, like you look for like hourly professional caregaters that can help out outside of you.

You can look that up easily online. Then when it comes to like community centers where they're like independent living or assistill living, they cover you know, one to two idios three to four and that's paid on a monthly basis, so you could actually look at the costs of them as well. And then finally, like nursing home that really like differs depending on if you want to like have your own room or you're willing to share a room like for budget reasons, and and you could get that

cost publicly online. But it's helpful to kind of, like, you know, really break up the three sections because you can get a lot more precise about budgeting as well, because a lot of people assume, like, oh, you know, let's assume you know, three and a half years of like nursing home like national statistics, whened you there are hitting costs before that leading up to you having like nursing home level help.

so helpful. And it occurred to me as I was going through your website that it almost might be a helpful tool to even be navigating these conversations with our parents and to be able to have a blueprint of how to move through it, because that can be a massive barrier too. I could be all goung ho about let's have this conversation. I just listened to a podcast.

But then there's resistance for any number of reasons. But what have you seen as far as how to have these conversations with parents on these different layers and topics and what do they want? How have you encouraged people to begin?

own lifestyle. And then when we think about like, oh, well, you know what about my aging parents, they might be like pretty like we might immediately think, oh, are they like financially pretty well off or like financially a little bit more frugal and like they're you know, kind of

like getting by. That is like probably the need at thought process of like, oh, you know, if they were to need more help anyway, can I like am I physically capable of like you know, stepping in to like help out just given all the other responsibilities in my life as well as, oh well, if they're going to start needing help, and if they might need to go to a lot of people assume a nursing home, or if they go into a community or or staying at home,

but they need some help there if I can't physically help them, you know, do they have enough finances to like pay for someone to come and you know help them out, you know instead. And so when it comes to, you know, how do people try to bring up having a conversation with their parents or when is the right time?

It really depends on the person. I think that a lot of the motivation ends up falling on unfortunately the children of like aging parents, like ourselves, because it's just the truth of the matter is that like a lot of parents who are part of like the baby boomer generation or the site like the silent generation, like right now, they've never really talked about that. It was almost assumed that like communally, like we would step in, like it was just like in like in the past, like like

family structures were a lot closer. And I think that culturally that meant that if you're nearby. We know, we help each other out whenever we need to, and we just live in a completely different society. Now we're part of, you know, being able to build our wealth and build like be responsible for our lifestyles, meaning means that we have to find careers where oftentimes it's like on you know,

polarized to the coastal cities. It's like what I've seen, and so now these are new concepts that we have to think about, which is like if I can't, you know, go move to the Midwest to take care of like my mom in some way, you know what will happen

because like is do I have to financially pay for that? Well, I have to plan that ahead of time that like several like years in advance, like ten to fifteen years, because it's expensive, like long term care is easily a six digit figure number, And so quickly getting a sense or or finding the right skill set to try and talk to your parents about financially what can you forward and what are your preferences is important in terms of

like gently trying to guide into that conversation. What I've found really helpful with the families that I've interviewed and talked to or within my company. Is first off, if you could get a sense of their you know, our parents' perspective in some way because I made some assumptions about

culturally they grew up in this structure. But like they might just be very like extremely you know, independent, or they might like and so that might mean like, oh, well they financially have enough, or it just might mean they're so independent that they don't want to receive anyone's help even if they financially can support that, like Okay,

that's a trickier situation. Or they might be really social and and you might think like, well, they're really social, but like, you know, dad is starting to have like mobility issues, So what's going to happen to mom? Like, you know afterwards, And so being able to just generally get their perspective around like, oh, how is retirement going? You know, uh, what are some goals that you have around retirement? You quickly get the sense that they thought

about this or not already. And you can always start the conversation gently by being really respectful and really non confrontational and saying like, hey, I you know, I learned about this concept of like long term care. You know, I think everyone's going to age, and I saw some statistics here that were surprising to me. I don't know if you've already thought about this. It's a light way to kind of like say, I got I learned something today. I don't if you already know it. To get a

sense of like you know, their knowledge on it. And I think the most important piece is, you know, when you do bring up the topic and they're kind of open to talking about like aging, considering their preferences and needs is like actually really important, which is like, uh, you know ask like fundamental questions that we ask are you know, how would you want to prioritize, you know, having how would you want to prioritize your financial security

versus you know, getting your care needs met as you age, like for example, So they might say like, oh, you know, I want to I want to make sure I have as much wealth as possible, no matter what, and it's okay if it comes at the cost of, like, you know,

my care needs, I'll figure something out. Or on the other extreme, they're just like, actually, like no, I actually really care about like, you know, aging with like dignity, and I want to have quality resources as much as possible, and I'm willing to pay whatever it takes to get there. Then there's a question. I think the other second fundamental question is like getting a sense of like, hey, you know, when you grow older, do you want to like how

how would you want to like? Have you thought about how you want your family members involved in your care in some way? And so from there you lightly get a sense of like, oh, I really don't want I want minimal involvement. I don't want you guys touching me.

I don't want anything of that to happen. Or they might say I really hate the idea of a stranger, you know, you know, stepping in and touching me in any way, And then that will give you a sense of just like what are their expectations already on you that you could start from.

would you you know, want it done? And so that so any any time that's in their lives, because it's so everybody I talk to in our age group, millennials, their parents did not save for retirement, and I so I don't. I'm sure that I live in like a select I can't say that that's for everyone, but for the people I interact with personally, we know that some

kind of caregiving is going to fall on us. And so yeah, I totally agree, Like forties is a good, really good time to start thinking about this and planning this,

like really front loading our own personal retirement. Time in the market is going to you know, beat time in the market, and so yes, really set yourself up first, but the earlier you can start asking these questions and getting an idea for like what your parents' preferences are, and really tempering their expectations too, and saying like, oh, you think that I'm going to be caregiving one hundred percent, this is really what I'm going to be able to do.

So it gives them time to temper their expectations as well. Even if they may not have the capacity to save enough in that you know, limited time span, they can start getting used to an idea of like, oh, we're collectively not going to have enough money for all the care I expected to be able to afford, because inflation is crazy and it has really changed a lot of

people's like budgets for long term care. Right, So like when we're looking at this, they can say like, I'm not okay, We're not going to have the money to do everything. These are the things that are most important to me, right, or to say like, oh, my my children are not going to be able to participate in

the capacity I assumed, let's think of other ways. And so it just even if financially we can't get all we want or give all we want in time, I think at least like I think tempering expectations or managing expectations is one of the most important things in this conversation because like it these conversations did not go the way I thought they would when I had with my mom. So it's not just tempering like their expectations, but it's

also tempering yours. It may take you five plus years to get the answers to these questions that you want, Like it's your parents like may not come up, like just may not be willing to upfront, like is that Lily, Like when you are talking to clients, like how how how did those conversations go?

But then you're like, how do we temper how do I temper my own expectations of like I think I'm going to live this lifestyle when in truth, it's like, well, if you have a existing relationship with your parents, especially like they're definitely going to have a say in like probably what your lifestyle is going to look like in order to like continue having a relationship with them as well,

and as their needs grow. And so what I've seen is like it's it's across the spectrum of just like from you know, individual saying like, oh, my parents actually are prepared, and I didn't expect it when I brought up the topic. They actually had a binder or a list of like all like you know, just like their preferences of like how do they want to age if you know, if something happened where they fell down and broke a hip, like what was that one pager on?

Just like you know, who to call and like like how to get access to like my finances, et cetera. And then if they also what's really important is like do they have a do not resuscitate form as well, which is like do they actually want to be like, uh, you know, do they want to sustain their life for as long as possible or do they care about actually the quality of their life? And they're just like, I don't really care about how long I live. I actually

care about you know, I don't want to live. I want to minimize my suffering for as long as I live. That's that's it's just totally like, you know, they are really great communicators around their preferences when they get older and this major risk that may happen. Then on the other side of the spectrum, it is a oh, you know, I like, I have a lot of I have a troubled relationship with my mom and she's growing older and she's really narcissistic and she lives by herself and she

won't talk to anyone else but me. And so in that case, and I've seen things in between of just like you know, like my parents lightly talk to me about it to your point, and like, over five years, I kind of get what I'm like, you know, looking for, you know here, And I think that I love the concept that you brought up with, just like you know, you have to put on your own oxygen masks first and then see what you could do from a financial perspective,

and then see what you could do financially for them,

but try to get ahead of any surprises. And so I think the concept of like really understanding yourself and what you're capable of doing, and what are your like, what do you like, what do you want to do, but then what are you capable of doing and really understanding that and so being educated ahead of time of you know, what are your likely roles either as a financial caregiver, as a physical caregiver, or a care coordinator for your parents, and your capacity to do any of

those things could be really effective. And actually even talking to your parents about like factually like I'm not even good at this, or factually I am like good at this, but I have a forty hour commitment and I have to take care of my kids, and so I want to try to figure out how to make this sustainable

with you. So I think being able to communicate really clearly of like what your boundaries are, what your preferences, what are your skill sets in being you know, a type of caregiver is really helpful to bring to the table, you know, as well to kind of get the logistics smooth.

doing the research. Having the conversations doesn't mean that we have to have all of the readiness currently, I think is what's standing out to me from our conversation. But speaking of communication and transparency and setting expectations.

We are ready for it, and now it's time for the lightning round.

have something that keeps them busy? But also secondly, it's like if they were to grow older and like need help, Like we talked about like like what are our skill sets in that, Like just like you know, my sister's a doctor, so she would probably like step in like for care coordination. She's also the closest, so she would

step in for physical caregiving. So I've gotten ahead of and told her, hey, like you're already stressed out as a doctor and and stuff like that, and I know that you want to like go visit them and do things, and I'm worried about you burning out because if you burn out, like who's kind of like next in line to help out? And can we be effective like in that?

And so I've already developed a light plan with like my siblings about like you know, what seems to make sense as well as you know, let's talk about plan being plan syed. What if they need a care then expected you know, we're trying to build our own financial wealth, like you know, how would we pot in money together to try to figure this out? For our parents? What

are additional strategiies that they don't already know? So we already have a plan and all these like plan b's and Plan c's and resources that we could talk about and be flexible on. As soon as our parents become like incrementally more and more ready to talk about you know, aging and how they're trying to do that.

she was like the primary caregiver as well. So that's been really helpful for me strategically to kind of get all those pieces laid out. But I cheated in that case. But yeah, Jenn, love to hear what you do.

So thankfully I've set up my life to have a flexible job where most of it will be me, like physically caregiving. And thankfully my husband's parents they're going to be good to go. They have a business they're going to sell. It is a thriving business that people already want to buy and then their daughter. My sister in law is also very close to them and is just a natural caregiver.

for free, or there might be some people that could come to the house, or you know, there are probably

some programs to do home renovations. I know, aging at home is huge, so I would keep an eye out for government programs that are getting bigger and bigger on like stuff like that, and then separately, like if you don't have to pay out of like you're not obligated to pay out of pocket, there is still that safety net of like qualifying for like Medicaid based off of like you know, wherever your mod wants to live and she really doesn't have enough saved up, she can quickly

get access to that and the most efficient way if you go down that path is with an elder law attorney.

We've talked about her moving closer to me, but beyond that, haven't said much so but as far as finances go, I mean, she thankfully has been very transparent with me about what she has currently. We've talked some strategy about the way that we can leverage what she does have and the amount of working years she has left. And for myself, she actually doesn't know this. I don't know why I'm keeping it a secret, Maybe because I'm like concerned about how much I can set aside. Although she's

listening to this podcast here, here you go, Mom. If she's gonna listen to one, it's gonna be this one. It's probably gonna be this one. Yeah. I do, whenever possible, set small amounts of money aside monthly into a high yield savings account to be able to earn interest on that money. It's not a lot, but it's one of those things like if she does move down here, we've got a chunk of change to help with housing or

maybe monthly needs, that kind of a thing. So my mind has been primarily on the financial aspect, but it's helpful to remember, yes, there are physical and emotional aspects to this too that I think there's more room for conversation for me. So thanks for the insight you've brought to the table today.

long term care costs real quick. A lot of people assume that, oh, it's going to you know, grow at the same rate of you know, inflation three percent, but actually health care inflation rate, if you look at the actuarial tables, is closer to what's projected for the next ten years six point oh five percent. And so what that actually means in layman terms is that the amounts of money that you're gonna need is going to double

every twelve years. And so actually putting money away today that actually is growing makes a massive impact on how much the monthly contribution is going to start looking like if you started today versus if you started five years from now, ten years an out or something like that. The other thing I'll take into account when you do budget is where you're putting that money, because you could pull you could pull money from high old savors account, but if you wanted to like invest it, like really

understand what your tax bracket is is really crucial. And if you don't have like a long term care policy, which is usually tax advantage, if you pay for this out of pocket, understand your tax bracket and understand what portion of the funds that you'll probably be pulling for long term care expenses are qualified assets, not qualified assets, and not taxable like roths. So I wanted to just put that out there's like light things to research to optimize the budgeting.

dot com. Because sometimes there's just families that I've been following for a long time where they need resources and I'm just like here to like offer them. Of course, I just say, like, I'm not a financial professional an elder law attorney, but I do come from a little over a decades worth of experience and like healthcare, and I've seen like a wealth of resources like in the space, so I could just pass that along without any sort

of like commissions or incentives. It's just like, yeah, I'd love to be helpful if I can.

if not just pay on behalf of these families. And so we want to see I'm actually building out business relationships right now to see how can we make this free for families to build, to plan on and get some really strategic, great conversations there to have better outcomes on the topic.

my own home. But then they'd be able to chat with you, to chat with Lily, to know that there's a plethora of other people out there so excited about this resource that Lily's creating through water. Lily, I'm just I'm so thrilled, and I've got a lot of my own takeaways, so I'm also excited for our community and the takeaways really tangibly that can happen out of this episode.

buying things and paying off debt. We need to be starting that early because in our forties is when we need to start thinking about, Okay, how do other people's finances affect me at this point, you know, like maybe it's not Maybe my own parents are fine, but what about my partner's finances? Right? And then maybe even like if I want to contribute to my children's finances, you

know what am I doing there? So it just reiterates how important it is to start investing for yourself early, so that when when this topic comes up, it's not nauseating. It's just inconvenient, right, And I'll take inconvenient and maybe a bit of a bummer over nauseating and anxiety inducing.

happening with the freebies and the savings tips. It goes out three times each week and we talk life hacks, all sorts of money tips that just help you save money, spend better, all the things we talk about in the show, but then readable, so depending on how you learn, and you want to see visuals and graphics, we got it for you. We also want to give a shout out to this friend for sending us the sweet email last week in response to the friend letter. I hope this

finds you well. Jen and Jill. I just listen to your latest episode on contentment and I really appreciated your vulnerability lightning round pertaining to motherhood as well as your thoughts on contentment pertaining to parenthood throughout the episode. Love the podcast and am so encouraged every time I listen to you both. You are both so inspiring and it makes me feel like I am not alone in my

debt payoff journey. I also really appreciate the email encouragement for no spend January to keep me motivated and reminded me of why I'm doing this.

give them some goodies and take the mega survey. Take the Mega Yeah, there's a link at the end of the friend letter that you can share. It's your specific referral link. When you send that and you get someone to say sign up, you get goodies. In addition to the friend letter, which is a goodie and a whole snack in and of itself. You get stickers or a tote or a mug, depending on how many people you refer.

it is over the computer internet. But Jen has finally been coming over and co working with me. It's been amazing. We just obviously recorded this episode together. Come to find out, we are coming up on six years of podcasting together. I've lived here for three and a half and you hardly ever come over and work from here, partially because I've been under renovation, but my kitchen's been done for

a year. Jen just told me this week that one of her main barriers to not coming and co working at my house where our studio is, is because I don't have a microwave. This is a fact.

knows I've been wearing the same pants since Monday. And she's now here because she now knows my my thing that looked like an oven as a microwave.