Caring For an Elderly Loved One Can Take a Financial Toll

There are 65.7 million caregivers, making up 29 percent of the U.S. adult population, according to the National Alliance for Caregiving. The numbers are expected to grow because of longer life expectancies.

Caregivers, on average, spend more than $5,500 per year in out-of-pocket expenses. Long-distance caregivers shell out more than $8,700 per year for incidentals such as transportation, food and supplies. As a result, more than half of those surveyed online in November by, a caregiving website, are concerned about the impact of caregiving on their savings. The demands of caregiving can also affect a caregiver's plan for working and retirement.

NOW IS THE TIME TO HAVE 'THE TALK' WITH YOUR PARENTS: Talk to your parents about their current assets and income, debt and spending, the percentage of their assets that are liquid, and their plans for covering medical and long-term care needs.

Have this conversation while your parents are still healthy and able to handle their own affairs. Try broaching the topic indirectly by talking about your own finances or those of someone you know.

You want your parents to understand that you're doing this not out of greed, but out of concern and a desire to be prepared if something were to happen to them. You want to plan with them, so you need to know what financial resources they have that you could tap to meet their needs.

ESTATE PLANNING: Make sure you have the proper estate planning documents prepared. Particularly important is the financial power of attorney that your parents would sign, giving you the power to handle their financial affairs if they become incapacitated. Talk to your parents' bank and see if it has a specific form for financial power of attorney.

KNOW WHAT'S COVERED: Know what Medicare and Medicaid will and won't cover when it comes to caregiving. Generally, Medicare doesn't pay for long-term care. It pays only for a medically necessary skilled nursing facility or home health care, if you meet certain conditions. Most long-term care assists people with activities of daily living, such as dressing, bathing and using the bathroom. Medicare doesn't pay for this so-called custodial care.

Medicaid, the nation's public health insurance program for low-income people, is the largest source of financing for nursing home care and community-based long-term care. For example, it would pay for the aide who to come to your elderly parent daily to bathe them and do some light housekeeping and grocery shopping.

FIND HELP: Many community organizations offer free services that can help you through this trying time. Take advantage of everything for which you qualify.
Being a caregiver is a demanding but rewarding role. While it's important to make plans in advance, it's difficult to be prepared for every contingency.

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