Recently, you’ve noticed that your dad is becoming less able to do the things he used to do. Your mom is trying her best, but the physical requirements are tough. Getting dad out of bed and into the bathroom is weighing on her, both physically and mentally. Maybe it’s time to give mom a rest and start helping out.
Before this happens, it might be wise to have a financial plan in place. Why a financial plan? Mom and dad have plenty of money, don’t they? Maybe. But even if dad has the means to pay for care, your involvement comes with a price.
According to a study from Caring.com (www.caring.com), about a third of all family caregivers spend more than 30 hours a week on caregiving tasks, such as shopping, driving to doctors’ appointments, preparing meals and cleaning. More importantly, more than a third spend upwards of $10,000 annually on expenses such as medications, medical bills and in-home care.
The Caring.com survey of 1,345 online visitors found that 46% spend more than $5,000 out-of-pocket. In fact, about 7% spend $50,000 or more. But this isn’t the entire picture. Of all the caregivers who are still working, 60% indicated that their caregiving duties had a negative impact on their jobs, with 17% missing significant time at work.
So, you have a two-edged sword working against you. You’re missing work, which means you may have a decrease in pay, while at the same time, you’re forced to pay for more and more care. Where is that money coming from? Your savings and retirement plans. On top of this, your own family’s lifestyle is suffering. Vacations are cancelled. You find it increasingly more difficult to attend your children’s sporting or school events. The mental stress is taking its toll on you and you’re taking it out on your family and co-workers.
So what planning should be done? First, look to your own situation. Do you have sufficient life insurance if you should die prematurely? What about disability insurance? Remember that the mental stress of care can affect your very ability to even work. Will your income continue? Remember, if you’re not working, there are no further contributions to your retirement plan, and in fact, there may be an added cost for health insurance. Cushion your own children from these experiences later in life by owning long-term care insurance.
If you have siblings, have a discussion about how care – and money – will be divided up. If your dad already needs care, it’s imperative that you move quickly. If you’re an only child though, to whom do you turn? Do you have to move in? 59% of caregivers in the study live with the person getting care.
Make sure that you – or a sibling – have both medical and financial powers of attorney. Don’t wait till dad’s Alzheimer’s prevents him from signing off on his assets, leaving you to foot the bills.
We all have plans and goals for our families, and we all have a vision as to what our retirement will look like. And, every one of us would step up and help mom or dad, no questions asked. Make sure your plans work together and don’t collide in an explosion of unplanned-for costs.
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