Caring for an aging parent may be the highest calling of your life. But it also can rob you of time, money, and your own experiences. In some cases, these personal sacrifices can create bitterness and regret, causing ill will toward the very people you love and have pledged to help.
MetLife's aging and retirement research unit, the Mature Market Institute (MMI), measured the financial costs and sacrifices of family caregiving in a study released last month. More recently, it used those findings to create recommendations for how family members might cope with the financial stresses of caregiving.
The number of people taking care of an aging parent has soared in the past 15 years. MetLife estimates that nearly 10 million adult children over age 50 now care for an aging parent. In 1994, only 3 percent of men and 9 percent of women helped provide basic care for a parent. In 2008, 17 percent of men and 28 percent of women provided such care, which is defined as helping with dressing, feeding, bathing, and other personal care needs. This level of help goes well beyond grocery shopping, driving parents to appointments, and helping them with financial matters. And it's more stressful as well.
In taking the time to provide family care, MetLife said, working Americans lose an estimated $3 trillion in lifetime wages, with average losses of $324,044 for women and $283,716 for men. With these costs and other money issues in mind, MMI researchers put together 10 tips about the financial consequences of caregiving.
1. Think very carefully before quitting a job to help a parent. Gaining time may be offset by not only your loss of current income but also damage to your retirement savings. If you leave work, what are the odds of finding work in the future? Would your job skills still be attractive to prospective employers if you didn't work for several years?
2. Would you lose other helpful benefits if you left your job? In addition to your own health insurance, are there employee disability, life insurance, and long-term care insurance policies that would be very costly to replace? Check out your employer's flex-time and family leave policies. Perhaps they would allow you to keep your job.
3. Make a caregiving budget. Before making a lifestyle decision with financial consequences, put together a comprehensive look at what you are spending on caregiving. Make a companion list of your parent's resources and how they might be better used to support caregiving activities.
4. Explore free or low-cost public benefits. Several websites can provide help in identifying and getting help with caregiving tasks. Check out the government's eldercare locator. The National Council on Aging operates a benefits checklist service, and the National Association of Area Agencies on Aging has extensive information on caregiving help, plus an online locator to a local office in your area.
5. Learn about Medicare and Medicaid. Think Medicare covers nursing-home stays? It does not? Medicaid does, but only people who have exhausted most of their assets qualify for Medicaid-paid nursing home benefits. What kind of Medicare coverage does your parent have? Do they also have a Medigap or Medicare Advantage policy? A drug plan? What are the co-pays, out-of-pocket limits, and other financial aspects of their insurance? Check out MetLife's own primer on Medicare and Medicaid.
6. Understand the costs of keeping your parent in their home. Most people want to grow older in their own home, surrounded by possessions and memories. How much will such "aging in place" cost, and can you find help? MetLife has an Aging in Place Workbook. For a detailed look at in-home and institutional care costs, look at the 2011 Genworth Cost of Care study.
7. Consider professional help. If your parent's needs are extensive and challenging, consider hiring a geriatric-care manager who can put together a care plan for you, and can often identify community resources to reduce your own expenses and time. The National Association of Professional Geriatric Care Managers can explain professional standards and services, and also has a locator to help you find a professional nearby.
8. Watch out for financial scams. Financial abuse of the elderly has, sadly, become a growth industry during the nation's tough economic times. Make sure your parents are protected from making hasty, poor, and expensive financial decisions.
9. Have "the conversation." Make sure you understand what your parent want should you wind up with the legal power and responsibility to make decisions for them. This conversation may be uncomfortable for both of you, but it is essential. If you don't know the ins and outs of a power of attorney, a living will, or a healthcare proxy—and few people do—find an eldercare expert or attorney to help.
10. Make your own retirement plan. How are you fixed for retirement? Will you be able to support yourself? How might your financial future be affected by taking care of a parent? Are there steps you need to take to deal with these implications?