What If I Become a Caregiver for a Parent?

An inevitable part of life is one’s parents growing old. 63 million Americans are family caregivers, and the number continues to grow. The majority are caring for adults, and some are “sandwiched,” simultaneously trying to care for elderly parents and young children.

Becoming a caregiver can negatively impact your finances as well as your mental and even physical health. It is often hard to find the support you need. If you’re facing this particular “What If” Monster, you may have visions of it taking over your entire life.

The Impact of Caregiving

As people live longer, informal and unpaid family caregiving has become an important part of healthcare. Family caregivers are often hit at multiple levels. Caregiving increases your risk of both depression and physical health problems, but many carers report that they are not strained and have fewer problems. Older caregivers, such as spouses, see a higher risk of unintentional injuries and may neglect their own health. If your “healthy” parent is taking care of your sick one, make sure they get help. Caring for someone with dementia is often one of the most challenging caregiving situations.

Financially, though, caregiving can hit individuals and families hard. Most caregivers experience financial strain. Many are forced into a horrible choice: Give up working and be broke, or hire professional help and be broke. Families also often have to cover nursing home costs, housing costs, home modifications, and clothing.

For families with more money, it would seem to be easier, but it can still have an economic impact. There are still lost hours of work and lost chances at promotion, being the highest risks. This can, in turn, impact your retirement savings and personal financial goals. Many carers need more time off or accommodations, such as coming in late or leaving early.

Planning for Expenses: A Blow to the “What If” Monster

Start planning for expenses early. In fact, you should have some idea what caring for your parents will cost before they start to develop health problems. For example, the cost of a home health aide, while varying significantly, averages to about $35 an hour. 24/7 coverage costs significantly more, and hiring a nurse is also expensive. Meanwhile, a nursing home can cost as much as $4,500 a month, more if you are looking at a more luxurious facility.

Assuming the worst allows you to set aside the money…and then if it is not needed, it can be redirected to other family expenses or your own retirement.

Full-time home carers also spend thousands a year on things such as food, clothing, medical care, and extra gas. There’s also a potential opportunity cost. For example, if your parent lives in a small apartment or guest house on your property, you may no longer be able to use that space as a rental. Talk to your parents about long-term care insurance, and speak with your wealth advisor about setting aside funds and preparing a financial strategy.

Build a support system right away. If you have siblings, have frank conversations about who will do what, and make sure the burden is not placed entirely all on one person. If somebody can’t be around to help, they may be able to assist financially.

Have the Tough Conversations Early

There are few things worse than an incapacitated parent who didn’t make long-term care (LTC) plans. Talk to your parents about their healthcare wishes, including when they may not want further measures to be taken. Again, discuss LTC insurance. Determine who gets power of attorney early, especially if you have siblings. It’s much better to have these tough conversations while everyone is still able to make informed decisions. If a diagnosis of a degenerative disease, such as dementia or Parkinson’s Disease, is made, sit down and talk through the plan. Involve their care team to help keep someone with Parkinson’s home as long as possible.

Supporting Family Caregivers for a Stronger Future

Working with a financial advisor can help you defeat the “What If” Monster before it shows up by having a plan for your parents’ care ahead of time, and by navigating your options when a crisis happens. Even if you haven’t pre-planned, we can help you make informed decisions during a challenging time.

A comprehensive financial plan is the best way to navigate all of your major life transitions, including this one. Contact CrossleyShear to talk about your long-term financial goals, whether you are facing the caregiver “What If” Monster or not.

Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation. The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Dale Crossley and Evan Shear and not necessarily those of Raymond James.