The MetLife Mature Market Institute has released a publication, Planning Tips: Financial Considerations for Family Caregivers, to help the many Americans who lose a considerable amount of money when they take time from their jobs to care for their aging parents and also spend a good deal of their own funds to do so. Their recent study, "The MetLife Study of Caregiving Costs to Working Caregivers: Double Jeopardy for Baby Boomers Caring for Their Parents," found that the 10 million employed caregivers in the US lose an estimated $3 trillion in wages, pensions and social security benefits over a lifetime if they leave the workforce prematurely—that's about $304,000 per person—not counting additional out-of-pocket expenses related to caregiving, like travel costs, contributing to the parents' household and purchasing items needed by the care recipient.
"These tips were developed as a companion piece to the study to provide solutions for the legions of dedicated caregivers who are making not only emotional and physical sacrifices, but also financial sacrifices for their parents," said Sandra Timmermann, EdD, director of the MetLife Mature Market Institute. "There are steps people can take to mitigate the hidden costs of caregiving and there are programs employers can put into place to help support their employees."
These financial tips for caregivers may help:
- Think twice about leaving your job to provide care, as it will impact your lifetime wealth and future employment prospects. In addition to losing a paycheck, you could also be missing out on years of service required to become vested in a defined benefits pension plan, to receive matching 401(k) funds or to build Social Security benefits.
- Check with your employer to determine what benefits are offered and how you would replace them, should you curtail your employment. Your employer may be able to provide workplace accommodations, like flex-time or family and medical leave (FMLA), so you can stay in the workplace while caring for your relative.
- Take stock of what you have and your expenses for caregiving. Consider your current costs for travel, home care and any other items that you cover. Add up all your current out-of-pocket costs for caregiving and create a budget for these expenses.
- Look into public benefits. Community services may be available for low cost or no cost and can offset out-of-pocket expenses. At www.BenefitsCheckup.org you can find a free, confidential service that can help older adults locate programs to help pay for some of the costs associated with prescription drugs, health care, utilities and other essentials.
- Become knowledgeable about Medicare and Medicaid. Medicare is not all-inclusive and you will want to be aware of costs for premiums and deductibles. Some enrolled in Medicare may also qualify for Medicaid, which covers a range of health and long-term care services.
- Calculate what it would cost to keep your loved one at home. There are many resources to enable an older person to age in place with additional services such as meals-on-wheels, adult day services and home modification.
- Consider enlisting a geriatric care manager. Geriatric care managers are usually social workers or nurses who assist with evaluation, referral and monitoring a plan of care for older persons.
- Be aware of possible elder financial abuse. Older individuals, especially those with physical or cognitive impairments can be vulnerable to exploitation that may deplete one's savings.
- Discuss your loved one's legal, financial, and medical wishes. Investigate Power of Attorney, Durable Power of Attorney and a Living Will.
- Create a budget for your own future retirement expenses. Consider what portion of your income you'll need to maintain your current lifestyle after retirement; experts typically place it at about 80 percent of current income.