Caregiving can be stressful for a family in many ways. Financially, it can take its toll.
Caregiving families (families in which one member has a disability) have median incomes that are more than 15% lower than non-caregiving families.
47% of working caregivers indicate an increase in caregiving expenses has caused them to use up ALL or MOST of their savings.
The average family caregiver for someone 50 years or older spends $5,531 per year on out of pocket caregiving expenses.
Whether you’re in the middle of caregiving for a loved one, or are exploring what’s next in your family’s journey, understanding as much as you can about family obligations can help your approach be less stressful. This guide can help you navigate this a little clearer and develop some strategies that may work for you.
Start By Talking With Your Loved One About Their Finances
This is never an easy thing to do. People often are very secretive about their finances; they’ve never had to share before. They may be overwhelmed by this current path in life.
But as a caregiver, you won’t know what’s available to you unless you have a clear picture of where you are. It’s not about your loved one losing independence; it’s about helping them keep what they’ve achieved in their lives. Things to talk about should include:
Do they have a durable power of attorney?
Do they have wills in place?
What insurance plans and long term care policies do they have?
What about account information – banks, investments, credit cards, and loans?
What about mortgages, annuities, safety deposit boxes, and real estate holdings?
Do they work with planners or advisors?
Where is everything? It’s easy to lose accounts if you don’t know where they are.
Create Your Strategy
After your sleuthing is complete, it’s time to start creating a plan. If your loved parents are willing participants, this is easier. If they fight it, it can take time to build trust. This is for their benefit. Don’t push. Instead, give them facts along the way to help them understand why this is important. If you have them on board, the process is easier.
As you find all information and documentation, create a binder or file to keep everything in one place. This will make things easier if and when you need the information.
Establish power of attorney if you don’t already have it. This will allow you to do every day things like pay bills, as well as make decisions in the event more major decisions need to be made down the road.
Then work to gain access to all accounts. Different institutions may have different rules, so it’s important to work through them one at a time. Don’t forget to check on Social Security benefits. Also, look into property and income taxes – a number of older adults simply forget to make payments. This can be a costly mistake.
When necessary, work with financial planners, lawyers, and other advisors to be sure you have expert advice. This is a new path for you and your parents; reach out to experts with all your questions, and rely on them for referrals too.
It’s just one of the things we do to help our clients too. We’ve been in the industry for years, and work with many experts across the Front Range. If you need a resource or two, just ask.