When loved ones need help, it can weigh heavy on you and your budget. About 38 percent of family caregivers — those who take care of a non-child friend or family member, such as an aging parent, for free — report spending more than 30 hours a week providing this unpaid work, according to a new survey from senior care resource Caring.com. And nearly half spend $5,000 or more per year out of pocket on caregiving expenses.
“Caregiving has an enormous impact on the lives of the people who find themselves in the role,” says Tim Sullivan, vice president of product at Caring.com.
And many Americans do. The most recent tally from the U.S. Bureau of Labor Statistics counted 41.3 million unpaid eldercare providers in the U.S. Women carry the brunt of the responsibility, making up 56 percent of caregivers.
“The reality of it is, in the U.S. — and other parts of the world as well — we’re a nation of working caregivers,” says Alyssa Johnson, vice president of global account management for Care@Work, a division of Care.com that customizes corporate care benefits.
[See: 10 Money Tips for Family Caregivers.]
Pairing the “working” with the “caregiving” is a challenge, and caregivers often struggle to keep up with their paid jobs while simultaneously providing this unpaid care to ailing loved ones. In fact, 68 percent of caregivers who work report that their caregiving has had a negative impact on their job, according to Caring.com. More than half (55 percent) have missed one or more weeks of work, while 13 percent had to leave their job due to caregiving responsibilities.
“Juggling professional responsibilities with the complexities of finding high-quality affordable care for an aging parent can significantly distract employees in the workplace,” says Jody Gastfriend, vice president of senior care at Care.com.
But the alternative — of leaving the workforce to tackle caregiving yourself full time — is not a financially viable option for most households. After all, the cost of aging is substantial. Financial services firm Fidelity estimates that a couple can expect to pay an average of $275,000 in health care costs alone throughout their retirement. That’s $15,000 more than Fidelity estimated just last year.
Long-term care costs, which have also been on the rise, can add to the bills substantially. For example, home health aide services cost an average $21.50 an hour (up 6.17 percent over the past year), according to insurance company Genworth’s 2017 annual cost of care survey. That adds up to $645 for a 30-hour week and $33,540 for 52 weeks. For a private room at a nursing home, the average cost is $267 a day, or $8,121 a month, up 5.5 percent over the past year. That totals a whopping $97,452 a year. “Understanding what it takes to manage such long-term care becomes the largest challenge when you care for elderly parents,” says financial planner Vid Ponnapalli, based in Holmdel, New Jersey.
[See: 12 Money-Saving Ideas for New Parents.]
Hopefully, individuals will have planned and saved enough to cover these costs themselves. In reality, though, caregivers can often find themselves paying some portion out of pocket. Beyond the 44 percent of caregivers spending $5,000 a year to care for their loved ones, a quarter of them dole out double that amount and more, according to Caring.com. Caregivers for people diagnosed with dementia can even find themselves spending upwards of $50,000 a year out of pocket.
What can you do to manage these costs? In a word, prepare. “Many people don’t think of caregiving in the same terms as retirement planning or paying for college, but these expenses are all common and, to a reasonable degree, predictable,” says Sullivan. “Those who anticipate them and do what they can to prepare will be a lot better off.”
Ponnapalli recommends first discussing with your parent what he or she already has in place. He knows of people who’d gotten insurance or saved enough to self-fund long-term care, but “their caregiving children are unaware of their parents’ financial situation,” he says. “The key is to know what is available, and then plan from there.”
Also, be aware of tax breaks you may qualify for as a caregiver, depending on your income levels as well as those of your parent. Currently, you may be able to claim a personal exemption for an elderly parent who is your dependent. You could also itemize and deduct qualifying medical expenses you cover for your parent, even if he or she is not your dependent. You may be eligible for certain tax credits, too, if you pay for eldercare assistance while you work.
Your employer might offer you some assistance with caregiving as well. If your company offers a flexible spending account, you could trim your tax bill. FSAs allow you to save pre-tax money to cover qualifying health care costs. The IRS set the annual contribution limit at $2,650 for 2018, an increase of $50 from the 2017 limit, but your employee determines the limit for your particular plan.
[See: 11 Money Tips for Older Adults.]
How else can your boss help with caregiving? Some companies are offering workplace benefits aimed specifically at assisting caregivers, such as senior care advisory services — providing expert guidance on how to manage the financials and other logistic demands of caregiving — and subsidized backup care for seniors, which connects workers with quality assistance if and when regular care plans fall through.
“When companies can offer a reliable way for employees to find last-minute coverage after normal care arrangements fall through, it’s a proven way to relieve employee stress and reduce costly absenteeism,” says Johnson.
Unfortunately, such employee benefits are not as common as caregivers. “While we’re thrilled to see more and more businesses beginning to offer some type of child care assistance to their employees, employer-supported senior care is a more recent phenomenon,” says Johnson. “But in today’s world, elder care workplace support is equally as crucial as child care benefits.”
Consider talking to your boss about officially adding these programs or others to the benefits package. “Be an advocate for yourself,” says Sullivan. “The temperament of employers varies, but in almost every case, working with your employer to help them understand your situation will not hurt you and may make it a lot easier for you to balance your work and caregiving obligations.”
You might even find out who among your colleagues is in a similar boat and what kinds of benefits they might need, too. “Ultimately, we are all in this together,” says Gastfriend. “At some point, most of us will either be caregivers or need them ourselves.”
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Managing the Costs of Caregiving originally appeared on usnews.com
