Are You Ready for the Staggering Cost of Caring for Your Elderly Parents?
The cost of caring for an elderly parent is on the rise and with an economy that has yet to recover; caregiving is having a long-term effect on family’s financial stability. Are you and your family ready? Most caregivers aren't and they and their families are dipping into their own retirement plans, savings and borrowing money to care for their loved ones.
The Financial Facts
- Working caregivers lose more than $659,000 over a lifetime from lost wages ($567,000), retirement contributions ($67,000) and social security benefits ($25,000). (MetLife, 2010)
- Primary caregivers are spending over $8,800 per year on out-of-pocket expenses, excluding the cost of facility care (Genworth, 2010)
- 63% Of primary caregivers reported lost income – an average of 23% of household income (Genworth, 2010)
- 36% Of secondary caregivers contributed an average of $2,600 per person for out-of-pocket expenses (Genworth, 2010)
- 1/3 of caregivers reported a direct negative consequence to their own careers as a result of caregiving responsibilities (Genworth, 2010)
Planning is Key
Caregivers and their families know that the financial burden for caring for their elderly parents can be potentially crippling, yet few have a plan for addressing these concerns. No matter if your family is years away from needing eldercare or in the midst of caring for your parents, planning is the key to success. A great way to start is to assess your current needs and gather information on your parents’ financial situation. In many communities, a helpful resource can be your local Agency on Aging. In addition, the US Administration on Aging has a useful Benefits Checkup online to help your family find and enroll in public and private benefits programs.
Prepare for Your Own Care
According to the US Government, 70% of Americans will need long term care. Yet according to the National Bureau of Economic Research, only 10% of people over the age of 65 currently have long term care insurance. One of the best financial decisions that you and your family can make is to get long term care insurance for yourselves now to prevent the financial burdens on your children and family as you yourself age.
From caring for your parents to preparing for yourselves, planning for care is critical for the financial success of your family.
Julie Fry is the founder of Making Care Easier (www.MakingCareEasier.com).