(Be considerate but smart in protecting your own money)
When you fly as much as I do, you can recite the safety briefing by heart, especially the part about
putting on your own oxygen mask before you help anyone else. The same sort of warning should be
given to the 43 million American adults who are family or friend caregivers—particularly when it comes
to their own finances. According to a 2011 study, the average lifetime cost to caregivers is $304,000 in
lost wages, pensions and Social Security. That doesn’t count the $7,000 in cash that 7 out of 10
caregivers pay each year (on average) from their own pockets to cover other costs. “How do you igve up
that much and still retire yourself?” asks Age Wave CEO Ken Dychtwald. If caregiving looms in your
future—and it likely does in you’re a daughter, an only child or the one (if you are, you know what I
mean)—take time now to protect your financial life.
STEP 1: Calculate the gap. The average cost of a full-time home health aide is $49,000 a year; a
semiprivate room in a nursing home: $86,000. Think you and your parents won’t need long-term care?
So do 63 percent of people over 50, note Age Wave. Yet 70 percent will, a clear disconnect. So ask your
parents about the size of their nest egg, how quickly they’re spending it, whether they have long-term
care insurance and how much equity they have in their home. If they won’t discuss this, a
compassionate financial adviser may be able to bring you together. Compare your parents’ assets
against their projected expenses, and you have your gap.
Step 2: Figure out how to fill the gap, without bankrupting yourself or your family.
Look for free resources. Go to benefitscheckup.org, set up the National Council on Aging, to
learn about federal, state and private benefits programs that apply to your charge.
Make a budget for what you can contribute—physically and in dollars. (Shockingly, 50 percent
of caregivers don’t track what they’re spending.) Then ask your siblings what they can pitch in;
just because you’re delivering the care doesn’t mean you have to foot the entire bill. Every
dollar you don’t spend can be put away for the future, so you don’t perpetuate this cycle with
STEP 3: If a gap remains, consider Medicaid. An unmarried parent may need to spend down assets to
qualify (nursing home residents can have only $2,000 in countable assets in most states). If your parent
is married, it’s more complicated; in general, the healthy spouse can keep one-half of assets, up to
$120,900 (not including the house). Call an elder-law attorney for help. You can locate a lawyer
through elderlawansers.com or naela.org, the site of the National Academy of Elder Law Attorneys.
STEP 4: Regardless of the gap, look into getting paid.
Two government programs—one from Veterans Affairs, the other from Medicaid—offer
additional financial support that can be used to pay family caregivers. If your parent is a veteran
(or spouse of one) who served at least 90 days of active duty with at least one day during a
period of war, check out what the VA has to offer. Be forewarned: Waiting lists for some
Medicaid programs are so long you might never see any money.
Have your parent pay you if assets are available. But first talk to an elder-law attorney about
drawing up a contract, notes Miles P Hurley, a certified elder-law attorney in Atlanta. This
document, he says, should answer questions such as “Is this child going to quit a job to provide
the care?” and “How many hours a day is the child supposed to pbe providing the care?” It’s
crucial to do this in a way that doesn’t jeopardize Medicaid eligibility—which is why you want to
involve a lawyer, preferably from the state where your parent lives.
STEP 5: Protect your own earning ability. If you’re midcareer, it’s very challenging to leave a job for
caregiving, then step back into the workforce at the same salary, explains C. Grace Whiting, COO of the
National Alliance for Caregiving. “Sometimes physically caring for a loved one may seem to be your only
option,” she acknowledges, but it may make more sense to continue to work while supporting someone
else who provides care. It can also be a good idea to ask for more flexibility from your employer. Given
that it costs six to nine months’ salary to replace a management-level employee, it’s not surprising that
many employers believe it’s less expensive to make an accommodation. Adds Lisa Winstel, COO of the
Caregiver Action Network, “Saying to your employer ‘I’m a family caregiver’ is not as taboo as it was five
or 10 years ago.”
(by Jean Chatzky for AARP Magazine; December 2017 / January 2018)