Although it’s not what one plans for, thousands of adults across the nation have found themselves caring for aging parents. This care could range from occasional assistance, like helping a parent shop for groceries or getting to their appointments. This increased demand for both time and money can lead to stress and strain for everyone in the family. Do you know what to expect?
In addition to the occasional help with a doctor’s appointment, many families also help pay for long-term care. Knowing what to expect can be of tremendous help when it comes to anticipating and preparing for the financial challenges of caring for an aging parent or loved one. Here are 3 of the biggest financial concerns that those caring for aging parents will likely face.
Take a long-term financial view and consider your own retirement
While it may seem more economical at the time for an adult to quit their job and provide full-time care for an aging loved one, it’s vital to look at how this will affect your finances long-term. According to the AARP, family caregivers who leave the workforce to provide full-time, unpaid care to a family member lose an average of $304,000 in wages and benefits over their lifetime. For women, who make up more than 66% of unpaid family caregivers in the U.S., this number is even greater at $324,000.
While that certainly affects a family’s budget immediately, it can have an even greater negative impact on a person’s ability to retire comfortably. Lost wages will also decrease an individual’s Social Security income once they reach retirement age. In essence, the decision to quit can create a ripple effect in which the caregiver’s grown children may need to help support them after retirement, negatively impacting those children’s ability to retire well. Because of this, many caregiving and eldercare experts advise families to explore every possible option before deciding to leave the workforce.
Explore and plan for hidden costs
There are many hidden costs of caregiving that should be taken into account before deciding how to proceed. The increased healthcare costs for the caregiver are often overlooked as it can be mentally, emotionally, and physically draining to care for a loved one. They may also struggle with depression or anxiety, which can lead to the need for mental health counseling.
Ensuring you have a financial cushion that allows you to pay for your own healthcare needs is extremely important. You can explore the benefits of Medicare and how they may be beneficial to your family with this guide.
Explore all your financial options with a financial advisor
Many families experience considerable financial strain when taking care of loved ones. They may dip into their savings, retirement accounts, or take on debt to help cover costs. However, before doing any of these things, it’s vital to talk to a financial advisor. He or she can ensure that families explore all their options, including ones they may not know about, like a life settlement. By providing an influx of cash, life settlements can become a big piece of the caregiver’s financial puzzle.
Ashar Group is a nationally licensed, independent resource for financial professionals and fiduciaries, helping them unlock the value of existing life insurance assets for their clients who no longer need or want their life insurance policy. We do not sell insurance or offer financial planning services, but we’re here to help your clients confidently take the next step towards a secure future. We invite you to contact us today to learn more about how we can support your business and your client’s well-being.