Originally published on clarionledger.com
Recently, I grieved with a longtime friend when her best friend and business partner died after a long illness. In recent years, she had taken on many of the responsibilities associated with taking care of her friend, and it took a tremendous toll in energy, emotions and finances. She found herself spending most of her time in the caregiver role, selflessly giving up her own interests to serve.
If you’ve ever taken on the role of caregiver, it is by itself a full-time job, and a noble one. But people are often forced to make the choice between working and providing the care their loved ones need. And these expenses are largely come as a shock to people who are generally looking forward to their own golden years; caregiving can drain bank accounts and wreak havoc on carefully-planned retirement nest eggs.
According to a Caring.com study released Monday, nearly half of family caregivers spend more than $5,000 per year on caregiving expenses. And many people spend much, much more; seven percent of caregivers report spending more than $50,000 each year, uncompensated.
The study defined a “family caregiver” as someone who takes care of a family member or friend, but is unpaid for their services. Their caregiving expenses include out-of-pocket costs for medications, medical bills, in-home care, nursing homes and more. In today’s environment, that often means that an adult child is taking care of their aging parents.
“Caregiving can be a startlingly expensive endeavor that most people aren’t financially prepared for,” said Caring.com CEO Andy Cohen. “But yet only three in 10 caregivers have spoken to their loved ones about how to pay for care. Having an open and honest conversation about finances is a sensitive, but necessary discussion to have.”
The study reveals that about half of caregivers have made changes to their work schedule to accommodate caregiving, while 30% often arrived late or left early and 17% missed a significant amount of work.
“Family caregivers, especially baby boomers, run the risk of derailing their retirement plans if they don’t prepare for the costs associated with caregiving,” said Cohen. “Almost half of caregivers spend $25,000 on caregiving in just five years – that’s a significant chunk of money that could delay retirement by a couple of years.”
Cohen suggests the following steps to help get a handle on caregiver expenses:
- Look at current assets, where the care receiver’s income comes from, and insurance entitlements.
- Prepare a budget and figure out what his or her future income might be from all sources.
- Confirm the qualifications, retirement benefits, and Social Security status of the person in your care.
- Figure as closely as possible the expenses of professional care and equipment. Include any medical procedures for other conditions likely to be needed.
- Check on the person’s personal tax status and find out what care items and expenses are deductible.
- Find out if the person’s health insurance or employer’s workers’ compensation policy has home health care benefits.
- Figure out how much money the person will need.
- If the person with AD doesn’t have enough money to pay for care you may need to consider whether you can provide financial help.