After publishing my piece on the shocking cost of eldercare, a question kept nagging at me that I couldn’t shake: when money is finite and the people you love are not, how do you decide who to help or save first?
A $230,000-a-year group home in Hawaii for one person. Four parents to potentially care for. Two children still in school. A wife. And a version of FIRE retirement that is starting to look a lot less like freedom and a lot more like a second career with no salary.
This is the financial dilemma I’m facing right now, and I suspect some of you are somewhere on the same spectrum, even if the dollar amounts differ.
The Numbers That Started This Conversation
As I detailed in my previous post, a single conversation at the pickleball courts changed how I think about eldercare costs entirely. A man told me his 94-year-old mother was in a group home costing $18,000 a month, and that before the move she had been receiving 24/7 in-home care at $35,000 a month.
For four parents, using a conservative $230,000 per year per person and assuming 5% annual cost increases, the total realistic bill over a three-to-five year care window lands somewhere between $3 and $5 million. That’s enough to fund a 30-year retirement for most couples and enough to set multiple children up for life.
Every dollar I direct toward my parents is one less dollar for my children, my wife, and our own future security.
Parents Can Break the Cycle of Dependency
Before getting into frameworks, there is a principle worth stating plainly. If you love someone, you want them to be financially independent from you. You would not want your spouse entirely dependent on you for survival. The same logic extends to your children, and it should extend to your own later years as well.
If you are a parent reading this and are under 50, one of the most meaningful things you can do for your children is to begin saving intentionally for your own retirement and eldercare so they do not have to face that responsibility on your behalf. The time to act is not when cognitive decline arrives. It is today, while you still have time, health, and earning power on your side.
Another option is long-term care insurance. After publishing my post, I learned my parents have coverage for up to three years. They hold a primary policy with Allianz and a smaller one with MetLife. Combined, the policies provide about $330 a day for up to three years. However, there are conditions before benefits are paid.
A physician must certify that the parent can no longer perform at least two of the basic activities of daily living, such as feeding, dressing, bathing, or transferring out of bed.
Once eligibility is confirmed, there is a waiting period of about 100 days before benefits begin. This period functions like a deductible, which can be difficult, especially given that some policyholders may never fully utilize the benefits.
Beyond long-term care insurance, another way to help offset the financial burden is through life insurance. A sufficiently long-term or permanent policy can provide a payout that helps reimburse loved ones who supported your care.
This was not something I had fully appreciated before. But in hindsight, I am grateful my wife and I secured matching term life insurance policies through Policygenius. Please do the same before you get too old and policies become too costly.
For those already in the sandwich generation, the question is no longer whether to prepare, but how best to allocate the resources we have.
Three Frameworks for Thinking About It On Who To Save First
There is no universally correct answer to this dilemma. But there are three distinct ways to approach it, each grounded in a different value system. The frameworks reminds me of two posts you might find helpful regarding the best order to fund retirement accounts for traditional retirees and the early retirees’ guide to funding retirement accounts.
The Practical Approach: Children, Yourself, Parents
This framework prioritizes whoever likely has the most life ahead of them and the most time to compound the benefit of your dollars.
Children first. They didn’t ask to be born, so you had better take care of them until they are adults. Fully fund their 529 plans where possible. Help them open a Roth IRA once they have earned income. Contribute to custodial accounts. But resist the urge to give them everything. Agency and motivation matter as much as capital. Children who learn to earn and manage their own money tend to build more lasting wealth than those who inherit it passively.
Yourself second. You cannot help anyone if your own finances collapse. Max your 401(k). Build passive income. Achieve enough financial security that your own children never face a repeat of this exact conversation in thirty years.
Parents third. Whatever remains goes toward their care, home maintenance, physical therapy, travel, and quality of life. The hope is that after 40+ years of investing through a historic bull market has given them a meaningful foundation to draw from. Their pride in self-sufficiency is real and worth honoring.
A reader mentioned in my previous post on eldercare: “I would not bankrupt myself or my children for my parents, nor would they want me to.” Your parents, if they love you, do not want to be the reason your retirement unravels or your children’s futures shrink.
A sample allocation on $1,000: 45% to children, 35% to yourself, 20% to parents. So you see, all three parties still receive financial assistance. It’s not like last place gets nothing.
The Dutiful Approach: Parents, Children, Yourself
You would not exist without your parents. If you genuinely appreciate everything they gave you, including 18+ years of raising, the education they funded, and the foundation they built, then that gratitude has a financial expression.
Parents first. Some adult children take this further than money. They leave careers, relationships, and cities to move home and provide direct care. I understand that pull deeply. I want to be the caretaker for my parents in their own homes, if they will accept me. For those who cannot physically be there, redirecting capital is the next best act of filial devotion.
Children second. Since you decided to have children, they are entirely your responsibility. Raising kind, capable, contributing people is also your obligation to society, not just your family.
Yourself last. As a working adult with the highest earning capacity in the three-generation household, you have the most ability to save yourself. Your parents do not, especially if they mismanaged their finances and are already well passed traditional retirement age. Your children are still in school, so their focus should be on education, not making money.
A sample allocation on $1,000: 50% to parents, 30% to children, 20% to yourself.
The Oxygen Mask Approach: Yourself, Parents, Children
Secure your own financial mask before helping others. A financially independent adult is a gift to everyone around them. No one has to worry about you, not even the government. You are free to be generous rather than desperate.
Parents second. They have less time than your children. The cost, while large, is finite. And frankly, giving your parents three years of excellent care costs far less in total than funding a child from birth through college graduation.
Children last. Children do not need fully funded 529 plans or custodial accounts to turn out well. What they need most is time, attention, a safe home, and a parent who has modeled what financial responsibility actually looks like. Most families never open any of these accounts, and their children grow up fine. Teaching your kids to earn their own money and make their own financial decisions is a perfectly sound strategy.
A sample allocation on $1,000: 70% to yourself, 20% to parents, 10% to children.
Our Plan To Provide
My wife and I reached FIRE in 2012 and 2015, so we are largely set. There will be ebbs and flows, but I am confident we can remain unemployed for the rest of our lives. There is also a small chance I may return to work, perhaps at an AI company, given I still live in San Francisco. My wife could also do more preschool teaching after she finishes her online course. If so, this would provide supplemental retirement income.
For the nine years after our children were born, we focused on them. We built up their 529 plans, custodial accounts, Roth IRAs, and most recently invested in private AI venture funds as a hedge against an uncertain job market. As a result, they are on solid footing as well. The VCX listing performed far better than expected. Meanwhile, Some of our earlier venture investments from 2018 and 2022 have some gems, like Glean Tech, Rippling, Together Computer, Harvey AI, and others.
Given this, our focus is now shifting toward preparing for our parents’ eldercare and related expenses.
A Group Effort To Provide Eldercare
While I estimate a realistic worst-case cost of $3 million to $5 million for four parents, writing about the topic led to productive conversations with my dad, my sister, and my wife, who is strategizing with her sister. I hope you have these conversations too.
What became clear is that this is a shared responsibility. My parents have long-term care insurance that could cover close to $10,000 a month for up to three years. My sister understands the situation and is willing to help, potentially even relocating too, if needed. On my wife’s side, her sister and brother-in-law are also working professionals who can contribute. I just forgot about them because we never see them as they are on the east coast.
My goal is to build a dedicated pool of capital, with a target of $1 million over the next five to ten years in a taxable account. Beyond that, I expect ongoing costs to be supplemented by growing passive income over time, as well as help from my sister-in-law, sister, and parent’s insurance policies.
The goal is not to sacrifice everything. It is to contribute meaningfully while preserving the financial foundation for the next generation.
The Bottom Line
Adulting is hard in ways that compound over time. The frameworks above are not meant to give you the right answer. They are meant to help you find your answer, the one that reflects your values, your family’s dynamics, and your financial reality.
Whether you go practical, dutiful, or oxygen mask, the worst outcome is having no framework at all, discovering the cost too late, and making panicked decisions with limited options.
Plan ahead. Start a dedicated fund. Have the honest conversations with your parents about their assets, their wishes, and what they want their final years to look like. Consult an elder law attorney. Look into state caregiver programs. Consider long-term care insurance for yourself while you are still young enough for it to be affordable.
And if you are trying to take care of your parents, your kids, and your own financial future at the same time, you cannot afford to be the single point of failure. My wife and I got matching 20-year term policies through Policygenius for exactly this reason. Get covered before life makes the decision for you.
And maybe most importantly, accept that you will probably not be able to do everything for everyone. You can only do your best with what you have. Taking care of family is a team effort. Don’t think you need to go at it alone.
Which capital allocation framework resonates most with you, and how are you balancing it against your children’s future and your own retirement security? I would love to hear how others are navigating this.
