If you are providing personal care and/or financial assistance to your parents, or anticipate doing so in the future, you may need to take a closer look at how it could affect your savings. Providing care for a loved one can take a toll not only on your physical and mental well-being, but also on your financial health.
Who Is Caring for Aging Parents?
According to a recent study, 25% of adult children age 50 and older – primarily baby boomers – are providing personal care and/or financial assistance to their parents.* The proportion of individuals providing such care has tripled over the past 15 years. And the trend is likely to continue.
In general, daughters are more likely to provide personal care and sons financial support, although many provide both. The impact on caregivers’ wallets can be substantial. According to the study, the average total financial impact on a caregiver age 50 or older is $303,880 (see chart).*
Caring for You
You may feel an obligation to care for your aging parents and derive personal satisfaction from doing so. However, be sure to take steps to reduce the impact on your own financial security.
- Talk with your parents. Have a frank discussion if your parents are still capable of talking about their finances. Find out about their financial situation, whether they have significant savings or long-term care insurance, and whether they are eligible for Medi-cal or other government assistance. Depending on the situation, you may want to obtain power of attorney over their finances, especially if you are concerned about their mental acuity or vulnerability to scams.
- Share the load. If you have siblings, ask if they can share the caregiving and/or financial responsibilities.
- Explore local resources. Your community may provide low-cost adult day care that can allow you to continue working or respite care to give you a break. You can find caregiver resources in California here.
- Take care of yourself. Be sure to maintain a healthy diet and get adequate exercise and sleep. Help control your stress by meditating, spending time with friends or enjoying any activity that you find relaxing.
It’s not selfish to keep your own financial future in mind. If you are saving in a 403(b) or 457 plan, strive to continue contributions. You may also want to consider opening and contributing to a traditional or Roth individual retirement account (IRA), especially if you have to drop to part-time work and can no longer contribute to your 403(b) or 457 plan. Finally, it may be wise to consult a financial advisor to review the state of your and your parents’ finances.
* Source: “The MetLife Study of Caregiving Costs to Working Caregivers,” MetLife Mature Market Institute®, June 2011.
* Source: “The MetLife Study of Caregiving Costs to Working Caregivers,” MetLife Mature Market Institute®, June 2011. The impact on Social Security benefits and pensions is based on leaving the workforce early or reducing hours in order to provide caregiving. .