Caring for Your Parents: Help Is on the Way Chapter 10 Money Smart Women

Caring for Your Parents – Understanding the facts……  According to research conducted by the National Alliance for Caregiving and AARP, the average caregiver is a 46 year old woman.  Another study found that most women will spend 17 years caring for children and 18 years helping an elderly parent.  Even if women have brothers with whom they might share the work, daughters spend significantly more time providing care for elderly parents than sons

Caring for Your Parents – Understanding the facts……  According to the National Alliance for Caregiving and the National Center on Women and Aging, and MetLife, caregivers experience a total lifetime financial loss of about $660,000, when you count lost wages, missed retirement contributions and missed Social Security benefits  In short, many women find themselves in the “sandwich” generation – The Gen “S-ers”  Caregivers surveyed in a Metlife study estimated their own out of pocket costs at about $20,000 on average to cover costs for medications, examples would include: medication, home health aides, etc.

Keep your Perspective  When dealing with divvying up financial resources and caring for your elderly parents:  Put yourself first.  You aren’t selfish, just practical. Note, when you are in your peak earning years, you need to build your own retirement savings, don’t be too quick to quit your job. Don’t lose sight of diminishing your own income in future years.

Keep your Perspective  Your parents come next, because their needs-- financial and otherwise-- are immediate.  Help is available in a variety of forms, ranging from caregiving options to tax breaks for expenses that you incur.  Don’t discount your parents own resources – you might even consider options such as a reverse mortgage or cashing in the cash value in an insurance policy. If they have long term care insurance, utilize all of the benefits available through such coverage.  Consider your kids last, though not necessarily least.  Shift some of the load to your kids when taking on expensive items such as college. They have their whole working lives ahead of them. In short, they have more earning power and more alternative sources of income.

Get Help from Your Employer  The Family and Medical Leave Act (FMLA)  Lets you leave your job temporarily to care for an ailing parent without disrupting your career. Your benefits can continue for a period of time and for companies with 50 employees or more, employees can take up to 12 weeks of unpaid leave each year and return to their old job or an equivalent one. Note – the leave is unpaid….  As you interview, don’t forget to ask about this option. Note this is federal law but your employer and you have to qualify to be protected by this law.  Flexible Spending Accounts  Most commonly associated with medical and child-care expenses but they can also be used to pay for elder care for a physically or mentally disabled parent who lives with you or whom you provide more than half of his or her support.

Get Help with Your Parent’s Care  In-Home Care  A combination of services might cover the bases for far less than the cost of a nursing home  Assisted Living  Provide round-the-clock assistance for residents who can’t manage completely on their own  Continuing Care  Continuing-care retirement communities offer a range of living options.  Most charge an entry fee

Get Help in Paying the Bills  The bulk of care costs will be paid out of pocket-- whether that be yours or your parents  Insurance will cover some things but not others. There is a lot of confusion about what it will cover.  As a “Money Smart Woman/Couple or Family” you should have an idea of what your insurance will and will not cover.

What to Expect From Your Insurance  Home Care  Don’t look for too much help from Medicare  Medicare generally pays for home care only when an elderly  person needs skilled medical-care services  Is confined to the house by an illness or injury  Is under the care of a doctor who has prescribed home-care services  Some Medigap policies pay for personal-care services up to a certain amount  Note: when thinking about entitlement programs such as Medicare – remember that entitlement programs are probably going to be redefined.

What to Expect From Your Insurance  Assisted Living  Long-term care insurance can help, but moving into an assisted-living facility won’t automatically trigger insurance benefits  Some assisted living expenses are tax- deductible  If a person moves into an assisted-living facility primarily because of his or her physical or mental condition the entire cost of care, including meals and lodging, counts as a medical expense.

What to Expect From Your Insurance  Nursing-Home Care  Medicare does not pay long-term nursing-home bills for age-related or chronic conditions. Ie, parkinsons, alzheimers….have to be diagnosed first  Most insurance companies do not either  THE BOTTOM LINE….Get Long-Term Care Insurance and encourage your parents to consider this option as well

Help from the IRS  Deduction for Dependents  If you provide more than half of a parent’s support, either in the parent’s home or yours, and if that parent’s taxable income is less than the exemption amount, you can claim the parent as a dependent on your tax return. (Note: the exemption amount is very low….)  Deduction for Medical Expenses  You can deduct the total amount of medical expenses that exceed 7.5% if your adjusted gross income (Note: On $100K income that is $7,500 per year or….almost $1000 per month.)

Help from the IRS  Dependent-Care Tax Credit  If you pay for someone to come into your home and care for your parent, or if your parent attends an adult day-care center, you can claim the federal tax credit for dependent care – if you qualify. Limitations are in place.

Break the Cycle  60% of adults either are or expect to be family caregivers.  Among “intense” family caregivers-- those providing at least 21 hours of care a week–  61% report suffering from depression and the majority of the caregivers are women.  Work together with other family members as much as possible. Get your strategy in place early in life so that you can gain commitments and have an understanding of what to expect before a tragedy or situation is looking you in the face….  Stay on the job as long as possible so that you don’t sacrafice your own future

Keep Your Parents in Control  If one of your parents comes to live with you, encourage him or her to be as independent as possible  Encourage parents, etc. to participate in community senior-citizen programs  Change your family’s schedule as little as possible  Keeping a normal life is KEY for the care give and for the person receiving the care

Don’t Stop Now!  Talk with your parents as soon as possible to discuss their means, abilities, and preferences, as well as your own. Also, talk with your siblings and work a plan out before you are in a situation that is very stressful.  Encourage your parents to purchase long-term-care insurance or give it to them as a gift.  Take steps to care for yourself first. You can’t help your parents if you sacrifice your own well-being, financial, and otherwise.  Research available options for care in the community before a need arises. Talk with friends or with elder care professionals.

Don’t Stop Now!  Make sure you understand how those options will be paid for and take advantage of any tax breaks that you might have coming  Hire appropriate professional assistance, especially if you live a long distance from your parents or require mediation between siblings