The cost of care for elderly

Covering the High Cost of Care for Elderly Relatives

The High Cost of Care for Elderly Loved Ones

As the Baby Boomer generation ages, more Gen-Xers and Millennials will face the challenge of balancing their lives and careers with the competing need to care for aging loved ones. Taking the time to plan for the future now—before your relative needs you—can prepare you for the cost of care for an elderly parent while safeguarding your own retirement plans.

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Financial Planning for Caregivers: Before You Become a Carer

I’ve watched a few cousins give up a good portion of their adult lives to become primary caregivers, and it’s a significant investment of their time and energy. No one is ever truly prepared for the emotional, mental, and financial challenges of becoming a carer. However, making a few key decisions early can help you and your relative immeasurably later on:

Location: Where Will Your Parent Live?

For many generations, the idea of people staying in their own homes as they age is a source of self-worth and pride. Even if this is initially feasible initially, the distance between you can contribute to higher direct costs. For example, the additional gas, mileage, and parking expenses will deplete cash-on-hand in increments of $20 – $50 per week. When totaled over the course of weeks, the impact can be substantial. On the other hand, your loved one could move into your home instead.

People often opt for nurses and third-party carers to visit their loved ones at home to give them peace of mind. The cost of home care is typically less expensive than nursing homes or assisted living. How much does it cost to hire a caregiver? It depends on the needs of the individual, but costs are typically lower for individuals who need housekeeping or monitoring rather than significant medical treatment. 

Alternatively, finding an apartment or long-term care facility near your home could make life easier for you while still preserving your elder’s independence. But remember: the cost of living in South Florida varies widely depending on the neighborhood and the city. This could be a time to discuss downsizing or moving to another area.

Employment: How Will Being a Caregiver Affect Your Job?

Most adults can’t afford to quit their jobs and devote 100% of their time to their elderly parents. If you’re about to take on the costs of caregiving, this is no time to lose your valuable income and benefits.

You might not have to put your career on hold. Speaking to your employer about caregiving options, such as working from home, may allow you to maintain your earning potential. Many professions today allow for remote access and flexible schedules, which could even result in greater productivity – Win-Win! 

For adults who work in shift professions, employers may be able to reschedule or even create new schedules for employees who need to devote time to caring for their families. Sometimes, creative discussions can lead to promising opportunities. Rethinking how your job and life interact may show different ways of solving the time problem.  

Benefits: Who Covers the Cost of Care for Elderly Relatives?

Public benefits such as Medicare and Medicaid can help cover some of the costs of caregiving. Additionally, local governments often have programs that can be of assistance. The private sector is one of the better places to search for programs. 

Many charities, religious organizations, and affiliate or special-interest organizations (veterans, unions, and the like) have free services available through community volunteers. There is no cost to doing Internet searches to see what turns up in the local area.

In many cases, the primary responsibility for caregiving falls on the relative who is geographically closest. However, siblings who live too far afield to provide meaningful daily assistance are not exempt from sharing care costs. Taking on some of the financial burden is part of caring for aging parents when you live far away. Don’t be afraid to ask family members to pay their share.

Budget: What Are the Actual Costs of Being a Primary Caregiver?

Now that you have an idea of the financial cost of care for elderly family members, you need to include the day-to-day costs of being a primary caregiver in your estimate. Costs can be direct and indirect. When creating the budget, be sure to examine expenses carefully. 

For example, you might spend evening hours with your mother, who needs care. During that time, you help her with dinner, a bath, maybe some physical therapy, or just listening. You help her into bed and wait until you’re sure she’s peacefully sleeping. At 11 pm, the home health care aide arrives to cover the overnight. What indirect costs did you just incur?

  • What did you do about dinner? Most people won’t go home and cook a healthy dinner. Instead, they will opt for drive-thru or something similar. Could your own health care or health maintenance (gym) costs increase in the future?
  • When do you have time for you? What projects were you working on before becoming a caregiver? The extra hour you had been devoting to professional development is burned. How will you continue your career if you’re not staying ahead of your peers? You could be costing yourself future income.
  • What about your family? Several years ago, my wife’s grandmother became terminally ill. She went into the hospital for treatment and left almost thirty days later for home hospice. The strain on the family was substantial. Both my wife and I would go to the hospital after we finished work and get home at around 10 pm on weeknights. We would spend most of the day and a good portion of the night on the weekends. Did I mention we had a four-year-old at home? Of course, our daughter was well cared for, but she missed out on our parenting and companionship during that time.

Scams: Is Your Parent Protected?

Florida is ground zero for senior scams, identity fraud, and other financial elder abuse. Seniors may be unaware of the dangers of being online, making it easy for criminals to access their credit cards, bank accounts, and Social Security numbers.

Fraudulent tax returns are also a concern. In the not-too-distant past, the IRS specifically identified Miami and Fort Lauderdale as two leading areas of the United States for tax return theft. As a caregiver, you should ensure that your elder’s tax return is promptly filed or that an extension is obtained. Communication with the IRS is important.

Above all, make sure your loved one’s assets are protected. There is no better time to review their estate planning documents and ensure the paperwork is in order. Talk with your parents about adding you as a trustee on the family trust, becoming a guardian, or letting you step in as their financial power of attorney.

Let Us Help You Plan for Future Elder Care Costs

Caring for a relative can take a toll on the whole family. Our elders lived a lifetime independently, and coming to terms with needing help is not the easiest task. Why not ease the stress by ensuring the cost of care for elderly parents will be taken care of?

If you are ready to make a financial plan for caregiving, email us at [email protected] today or call us to set up an initial appointment.

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