First Steps: Early Financial Planning for Family Caregivers
According to The MetLife Study, “Caregiving Costs to Working Caregivers: Double Jeopardy for Baby Boomers Caring for Their Parents,” there are so many adults in the U.S. workforce who must take time off work to provide care for their aging parents that the combined losses in wages, pension, and Social Security benefits tops $3 trillion each year. The study, produced with the Center for Long Term Care Research and Policy at New York Medical College and the National Alliance for Caregiving, also shows that the average individual loss over a lifetime is more than $324,000 for women and $283,000 for men.
MetLife has some suggestions for caregivers when it comes to their own financial security. First, caregivers should keep in mind their own financial future. If they cut back on hours or leave work to care for someone, they will not only lose some (or all) of their paycheck and curtail their possible career options in the future, they will also be losing future benefits such as a pension plan, the funds that would be part of a company’s matching to their 401(k), and their higher, eventual Social Security benefits. Instead of quitting, think about trying to work flex-time or explore taking a Family and Medical Leave (FMLA). Caregivers should check with their employer’s Human Resources department before making any drastic plans.
Also, if a caregiver becomes injured or disabled, they may not be able to provide financial support or life skills care to anyone else. As a preventative measure, they may want to consider disability income and long term care insurance, which will help with some level of financial support. They also need to maintain their own health care coverage; research shows that caregivers typically have more health complaints due to stress and extension than non-caregivers. Be sure to periodically review health insurance coverage to make sure it covers what is needed.
Caregivers often do not realize the extra expenses they can outlay when caring for someone else. Make a detailed list of items purchased and services paid for, being sure to save receipts, and run a budget to see what is sustainable, and where changes will need to be made. Everything from making extra meals to travel expenses can add up.
Caregivers should also look into what public benefits are available. The U.S. Administration on Aging, at www.eldercare.gov, has an Eldercare Locator which can assist caregivers in finding help in their community. There is also a free site, www.BenefitsCheckup.org, which lists programs that may cover some prescription drug, personal items, and other health care costs.