How To Handle the Financial Responsibility of Taking Care of Aging Parents
When it comes to caregiving, women typically bear the brunt of the responsibilities — and this can include financial, physical and emotional care. Because finances are often involved, it’s no surprise that a recent Fidelity study found that caregiving leads to financial stress — 62% of caregivers said they sometimes feel overwhelmed by this stress. And women caregivers tend to feel greater financial stress than their male counterparts — 65% of women report feeling stressed versus 54% of men. The study also found that 40% of caregivers have experienced financial setbacks due to their responsibilities. But, with the proper planning, a lot of these monetary stressors and impacts can be mitigated. In today’s “Financially Savvy Female” column, we’re chatting with Arvette Reid, an advisor and client services director at Lifecare Affordability Plan, which helps families facing difficult decisions about how to plan and pay for care, about how women can handle the financial responsibility of taking care of aging parents.
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Have the Talk
“After years of working in healthcare and finance, I have heard repeatedly, ‘People don’t talk about money.’ Most families aren’t comfortable discussing money around the dinner table,” Reid said.
But while this conversation may be uncomfortable, it’s in your best interest to have a frank conversation about finances with your parents.
“It is important to conquer these fears, especially as your parents age,” Reid said. “If your parents try to brush off the conversation and won’t give you the basics about their finances, explain that they are helping out both futures — theirs and yours — since most older adults want to make sure their kids are taken care of.”
“Gather all the documents that are about money and money adjacent, like investments, pensions, wills, trusts, life insurance policy, power of attorney documents, etc.” Reid said. “This is the best way to give you a full picture of your parent’s finances.”
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It’s important to understand exactly where your parents stand so you know how to navigate their finances as issues arise.
“If your dad is diagnosed with Alzheimer’s and is expected to die first, not only is it important to determine how to pay for his care needs, but it is also just as important to figure out how your mom will be taken care of with what’s left over,” Reid said. “For example, do you know if dad’s pension has a survivor benefit? Using a checklist will help guide the conversation about your parents’ financial picture and make sure nothing is forgotten.”
Educate Yourself About Long-Term Care
“Most people don’t know how much long-term care costs, whether it is staying home with a home care aide or moving to an assisted living community or nursing home,” Reid said. “Contact your local area agency on aging, an aging life care manager, or even plan a visit to a nearby assisted living community to get current pricing. It’s better to have this information in advance and know your options when the need arises. The goal is to know the basics before you need to, because digesting brand new information in an emergency situation is not ideal and makes decision-making far more difficult.”
Surround Yourself With a Team
When it comes to planning for your parents’ care and how you will pay for it, it can be beneficial to get professional help. The Fidelity study found that among those who utilized online or professional resources to help create their caregiving plan, 92% said this made the process significantly less stressful.
“When buying a house, you typically work with a team that includes a realtor, a loan officer and an inspector, each playing a key role in supporting you and your vision. It is also important to have a team of professionals well-versed in the many care options to help guide you through the process of determining affordable care options for your parents,” Reid said. “We tell our clients that long-term care planning is like a three-legged stool that must include healthcare, legal and financial professionals, and clear communication is the key to keeping the stool from wobbling.”
GOBankingRates wants to empower women to take control of their finances. According to the latest stats, women hold $72 billion in private wealth — but fewer women than men consider themselves to be in “good” or “excellent” financial shape. Women are less likely to be investing and are more likely to have debt, and women are still being paid less than men overall. Our “Financially Savvy Female” column will explore the reasons behind these inequities and provide solutions to change them. We believe financial equality begins with financial literacy, so we’re providing tools and tips for women, by women to take control of their money and help them live a richer life.
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