Carla Fried: How to navigate the high cost of becoming a caregiver
If you have yet to step into the role of caregiver, there's a good chance it may be in your future. A 2017 joint survey by Merrill Lynch and
While caregivers are overwhelmingly grateful to step in and help a loved one, their generosity comes at a high cost. Many caregivers provide financial assistance, and the average annual cost is about
If a 55-year-old adult child spends
That
Then there are less apparent costs. The physical demands of caregiving can make it hard to keep the same hours at work, or give the same effort. That can mean reduced income. An empathetic boss today may not be supportive when the next recession hits, moving you higher up the layoff list.
None of that is a reason to question the role of caregiver. Your desire (and need) to care for a loved one supersedes all, including financial cost. Needed by a loved one, you step in and do what needs to be done. Yet you can - and should - be as strategic as possible in lessening financial strain. In the Merrill Lynch/
That's potentially setting up your own kids' need to step in and help you. Taking time to consider ways to limit financial strain today can help you protect your children's future.
_Lower living costs free up more money for care. Most older Americans want to age in place. But if money is tight, a move that reduces living costs may spare the necessity of a caregiver's stepping in with financial assistance later. A 2016
If you wait until loved ones need care, a move becomes harder. Helping a 70-year-old parent see the financial wisdom of a move today is likely more practical than the emotional and physical toll of a move at 85.
_Resist quitting work as long as possible. It's not just the salary you are giving up. Your
Your health insurance could also become a huge cost if you quit work. The average monthly cost of an individual plan for a 60-year-old in 2019 was pushing
_Set generational priorities. An all-too-common pressure point for many 50- and 60-year-olds is providing support to adult children as well as elderly parents. Your kids can work. Your kids can make different lifestyle decisions. Your parents may need your help. If you're honest with yourself, your adult child may only expect your help.
Get paid. That you are doing this out of love is not in question. But that doesn't mean you shouldn't be compensated. If you have stopped work, a basic goal should be to get paid enough to cover your own personal health insurance and not have to touch your retirement savings until you are at least 65. If the person you are taking care of has the resources, you should discuss being paid. You may want to consult with an elder care attorney for advice on drawing up a personal care agreement (a contract).
If you are taking the caregiving lead among siblings, there should be a family plan for paying you. This is not about money so you can buy groceries for Mom or Dad. That's a separate issue. This is about you being compensated for the time you are putting into caregiving.
Also explore state-run plans that provide income to a caregiver. The most common programs are limited to individuals who are on Medicaid, but many states have programs that are not tied to Medicaid. For example, in
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