Lola was 80 years old. She had six children and 12 grandchildren and was a leader in her community. The night after her 80th birthday, she lost her favorite diamond earrings and stayed awake all night trying to remember where she left them. The following month, she went around the block for her daily walk and was found disoriented in a parking lot without knowing how to get back home. Her family was worried. Lola needed a caregiver.
While Lola and her family are fictional characters, the challenges they face are all too real. About 22% of adults over the age of 85 and 33% over age 90 suffer from dementia. More than three-quarters of adults over the age of 90 receive caregiving due to mental or physical limitations. Caregiving has a major impact on our economy — in 2021, family caregivers' unpaid contributions had an estimated value of roughly $600 billion.
If you anticipate becoming a full-time caregiver to one of your family members, whether due to disability, illness or aging, it is imperative that you plan ahead for the expenses. Here are three things you must consider before you become a full-time caregiver.
Evaluate your personal finances. After determining that Lola needed full-time caregiving, the siblings got together and decided that Carla, her oldest daughter, would take care of her. At 60 years old, Carla was semi-retired, had paid off her house and car, and was an empty nester whose kids had graduated from college. Carla also lived close to her mother, a perk for saving both time and money.
Like Carla, before becoming a full-time caregiver, you should reduce your debt obligations and monthly expenses to come up with a budget that reflects both your needs and any reduction in income.
Calculate the amount of money it will take to provide care. Carla had to consider how she would provide care for her mother: move her to a full-time nursing home, move in with her mother or have her mother move in with her. After adding up all the typical expenses such as medicine, doctor visits, food and any home renovations to accommodate Lola’s limited mobility, the children and Lola decided that the best choice was to sell Lola’s house and use the proceeds to provide for her care in Carla’s home.
At the same time, they ensured Lola’s estate planning documents were up to date, especially the durable power of attorney, insurance policies, pensions and Social Security.
Create a plan that will allow for a backup. Everyone needs a break sometimes. I have seen situations where the caregiver’s health diminishes due to the mental, physical and emotional stress of full-time caregiving. Please take time for yourself to exercise, eat healthy, keep learning and relax by hiring a nurse or home health aide for a few hours a day. Your family members will appreciate a happier and healthier caregiver.
Caregivers tend to be women, and women often already face financial challenges, such as the wealth gap, higher medical expenses and longer retirements. If you can afford it, make sure you aren’t facing the challenge of being a full-time caregiver without backup.
In our fictional example, Lola ended up living a long life with Carla’s daily care, assistance from medical professionals and frequent visits from her other family members. With some financial planning, you can support your own family members with full-time caregiving. A CFP® professional can help you consider the options and prepare for the future. Find your CFP® professional today.
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