Long-term Care and the Rise in Multigenerational Households

Former First Lady and longtime caregiver advocate Rosalyn Carter famously said, “There are only four kinds of people in this world — those who have been caregivers, those who currently are caregivers, those who will be caregivers, and those who need caregivers.” With informal (unpaid) caregivers providing an astounding half-trillion dollars in care each year, multigenerational households are on the rise.

The Times, They Are A-Changin’

Multigenerational living is nothing new. Before WWII, it was commonplace for multiple generations to live in the same home together. After the war, the country shifted to two-generational living in single-family homes scattered across rapidly expanding suburbs. At suburbia’s peak, multigenerational households had plummeted to 12% in 1980.

This shift brought with it a change in attitude toward multigenerational living that has hung on for nearly three decades. Independence is valued over interdependence. All you have to do is look at pop culture to know it’s true. Movies like The Hangover, Bridesmaids, Failure to Launch, and Wedding Crashers feature one or more adult characters living at home. In each case they’re portrayed as “losers,” or shamed in some way.

In a less than surprising twist, since the economic crisis of 2007 to 2009, multigenerational living has been on the rise again. In fact, it’s become such a trend that it has spurred a new home-building sector – multigenerational households.

These housing twofers are built to accommodate two, or more, generations on the same property with separate entrances. The larger layout is for adults with minor children, and the smaller layout is for adult children or grandparents.

This new trend can be an effective way to provide care and support for family members of all ages. Older members of the family can care for their children or grandchildren, while younger adults can care for older relatives.

According to Pew Research Center’s analysis of census data, that’s what’s happening. More than 64 million people live with multiple generations of family. Although many factors explain multigenerational living, providing in-home care for an aging family member is a common one. Twenty-four percent of seniors 55 to 64, and 21% of seniors 65+ lived with children or adult grandchildren in 2016.

Multigenerational Households Create a Win-Win for Families

John L. Graham, University of California, Irvine professor, wrote about the new housing trend in his book, All in the Family: A Practical Guide to Successful Multigenerational Living. He points out that multigenerational living, which is typical for families in other countries, has economic benefits.

Sharing household expenses can make the cost of living more manageable for every generation. Recent graduates can pay down student loans. Young parents can save on childcare. And older adults can avoid depleting their retirement savings for long-term care.

However, multigenerational living can be stressful for caregivers. The sandwich generation — particularly women — often end up stretched thin by demands of caring for both children and aging parents. Many of them also work part-time or even full-time jobs, and struggle to maintain their own health.

Organizations like the Rosalyn Carter Institute for Caregiving are dedicated to supporting family caregivers. The Institute advocates for flexible work schedules and paid caregiver leave. Additionally, they lobby Congress for access to affordable long-term care benefits that also meet the needs of family caregivers. But for now, families are on their own. At last count, 21 of over 100 caregiver bills introduced have been passed.

Jesse Slome, director of the American Association for Long-Term Care Insurance (AALTCI) suggests that multigenerational households would benefit from better financial planning. In particular, he encourages families to look into long-term care insurance policies. This type of insurance can provide peace of mind for both older adults and their younger caregivers.

Statistically, 70% of Americans over the age of sixty-five will need long-term care during their lifetimes. Costs for services ranging from adult-daycare to a private room in a skilled nursing facility can average between $68 and $253 per day.

Families who choose to provide in-home care for their aging relatives also take financial risks. Lost wages for the caregiver and out-of-pocket costs for respite care and home modifications add up quickly.

The Role of Long-term Care Insurance in Multigenerational Households

The good news is that long-term care insurance is available to help families with the financial burden of providing in-home care. AALTCI suggests consulting a long-term care insurance specialist rather than a general insurance agent, or financial advisor. They’re better equipped to help you find the best policy for your family.

Capital Retention, which specializes in long-term care insurance (LTCI), has plans that meet the needs of multigenerational households. Hybrid LTCI policies offer concierge-level care coordination benefits. Licensed health care practitioners can help you make claims, and process paperwork.

They can even help you find services that take some of the burden of care off your family. Covered services can include respite care, meal delivery, transportation, housekeeping, or necessary home modifications.

Family caregivers can receive cash payments with Capital Retention’s cash benefit option. This can support family members who experience a loss of income as they take on the role of caregiver.

Typically, long-term care insurance policies have a 90-day exclusion period before you being receiving benefits. If you choose the cash option, this exclusion period is waived and your caregiver can begin receiving payments immediately.

Finally, any unused cash value will be returned to your estate as a death benefit when you choose one of Capital Retention’s hybrid polices.

If you’re considering a multigenerational household arrangement, take heed of the AALTCI suggestion to plan ahead. Make sure your family members won’t have financial worries, as they provide future long-term care for you.

Complete the contact form on our website to initiate a consultation. Or, call 844 805 3557 to pre-qualify over the phone.

(Sources: Rosalyn Carter Institute of Caregiving and American Association for Long-Term Care Insurance)

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