DINK Dilemmas: Do I Need to Save More for Elder Care?

Affectionately referred to as DINKs (dual income, no kids) or SINKs (single income, no kids), the number of people who are deciding not to have children has steadily risen over the past decade.

So what’s a DINK to do with the $237,482 they would have spent on raising a child?

In this blog series, we rounded up several frequently asked financial planning questions from DINKs & SINKs and requested independent Avantax Financial Professionals and Home Office team members to weigh in. Visit our main blog page to view the other articles in this series!

Q: A lot of people tell me I’ll regret not having kids when I’m older since I won’t have anyone to take care of me. Should I save more for elder care than my friends who have children? 

• Amanda Young, CFP®, Financial Planning Analyst; Avantax: Regardless of whether you have kids, you should never assume someone will be willing and/or able to take care of you in your old age. That’s why I give similar advice to all adults: Make sure you have a durable power of attorney, a healthcare directive, a will and someone trustworthy who knows your wishes for care. 
  
  I encourage DINKs/SINKs to research entities set up specifically to help people who don’t have a friend or family member to help them with their needs – especially as you get older and potentially can’t drive to get to appointments or go to the store. Many DINKs actually plan for their end-of-life assets to go to these places to help aid seniors who need these services. This is one of my goals as well!
  
  Regardless of your family situation, you should always plan to have to manage yourself even through end of life, because help from family is never guaranteed. 
   
• Pardis Ferdosi, Financial Planning Consultant; Avantax: It’s a common myth that having kids guarantees someone to take care of you in your old age, but it doesn’t. Trust me, I know! My own parents live far away, so I can’t be there for them in the way some people assume kids will be. The truth is, care in your later years comes down to good planning, not who’s in your family tree.
   
• Emily Millsap, CFP®, Manager of Financial Planning; Avantax: There’s no guarantee children will want to (or be able to) take care of their aging parents, so it’s incredibly important for everyone to plan for potential care needs in their older age. Working with a Financial Professional can help you save for the financial aspect of elder care, but it’s also imperative the people you name to hold your power of attorney (POA) are fully versed on your wishes in the event you’re not able to effectively communicate those due to mental or physical health issues.
  
  Here’s the plan: Invest in long-term care insurance. It’s your ticket to future independence. Build a retirement fund with a cushion for care expenses, so you can choose top notch options like in-home help or a fabulous care facility. The best part? You’ll have the freedom to live life your way, now and later, without relying on anyone else. It’s not about having kids; it’s about having a plan – and that’s empowering!
   
• Caroline Piehl, CFP®, Independent Avantax Financial Advisor; TimeWise Financial: No one likes thinking about aging – especially when it involves thinking about who would care for you if you were unable to take care of yourself.
  
  One exercise we have our clients do is to write down a list of three people who would be able to take care of you if you could no longer take care of yourself. Who could/would be there around the clock? Many people can’t come up with one name to write down. This can be a good wake-up call to emphasize the importance of having a plan in place if a long-term care event were to occur.
  
  Long-term care planning can look different for everyone – for some, that means self-insuring and paying for care from your assets. For others, it means getting protection by purchasing a long-term care insurance policy. Think of it this way: We all have homeowners insurance for the one-in-a-million chance our house burns down. A long-term care insurance policy is similar, providing you with an income stream if you were to experience a long-term care event. This can help soften the blow of the increasing cost of healthcare. And, typically, the younger you are, the cheaper the policy.
  
  Ultimately, it depends on your financial situation to determine if self-insuring or looking at long-term care insurance policies are the right fit.
  
  Additionally, everyone should have a medical power of attorney (POA) on file. This person legally has the authority to make medical decisions on your behalf in the event you are incapacitated.