What CPAs know about caring for an aging parent or loved one
Posted on August 18, 2018
When you’re caring for a family member who is ill, you quickly realize that as care needs increase, costs do, too.
Many families cover everyday caregiving costs without thinking about it much, paying for out-of-pocket expenses such as groceries, gas and medical equipment not covered by insurance out of their own pockets. But those costs add up quickly and can create huge savings, budget, and retirement planning issues. Even more so if you pay for them with a credit card.
It makes sense to plan ahead for these costs — especially if you are also trying to save for your own retirement. To avoid dipping into your important retirement savings or going into credit card debt, here are some expert-backed strategies to help reduce what you spend on caregiving from the CPAs at Teipen Selanders Poynter and Ayres:
- Evaluate your family member’s finances. Make sure you know about all savings accounts, retirement funds, and health insurance policies that could be used to cover costs. (Medicare, for instance, covers some home health services, such as physical therapy and part-time skilled nursing care.)
- Research policy details, such as long-term health, life insurance, and hybrid policies, which can provide coverage for ongoing needs.
- Long-term care insurance, for example might cover the costs of home care, adult day care, assisted living, or even home modifications.
- Hybrid life insurance policies frequently include benefits that help cover long-term care expenses, too. A hybrid annuity could allow your family member to withdraw some earnings to pay nursing home or adult day care.
- Make sure you are realistic about costs. The national median hourly rate for home health aide services was $22 and the median monthly cost for a home health aide was $4,100 (Genworth 2017 Cost of Care Survey). The exact cost depends on where you live and how many hours of help are needed. Medicare only covers part-time or intermittent home health care, which means if you need regular or ongoing help, the cost will typically not be covered.
- Be open to cost-saving possibilities.If your family member is living with you or nearby, you may be able to help them perform some tasks, such as cooking and cleaning. Consider getting CPR training or basic First Aid training to take blood pressure readings, wound care or injections to save money.
- Share caregiving responsibilities with family members.Talk to your relatives to see if they can share the caregiving activities. Family help is often the most cost-effective solution.
- Outsource what you can’t provide. Check your local directory for a home healthcare agencies. You can also search online for a home health aide on reputable sites such as Care.com and Medicare.gov.
- Check government programs for available assistance. Veterans and widows of veterans can often get benefits to pay for care. The Aid & Attendance program offered through the Veterans Association covers some home care services. Check their website for details and how to apply, or visit your state’s Pension Management Center.
- Specific illness help. Grants or local programs can sometimes provide additional respite care or assistance with a specific disorder, such as cancer or multiple sclerosis.
- Research senior community activities available free or at a low cost. Look into day care programs sponsored by local agencies. This can be uplifting for seniors and provide a much needed break for caregivers.
- Make home more comfortable with modifications to increase safety. This can help prevent falls, which often lead to medical care costs and a recovery period.
- Install grab bars in the shower and beside the commode.
- Remove throw rugs that could be tripped on or get in the way of walkers and canes.
- Replace doorknobs with easier to use door handles.
- Lower light switches if your family member is in a wheelchair.
- Consider making the first floor of the home the main living space to prevent accidents on the stairs.
Strategically budget for professional help. Despite family help and keeping your family member at home, you may find it’s necessary to bring in additional care for medical assistance down the road. Plan for that in advance, so say TSPA CPAs. Consult an Elder Care attorney to find out what you can do now to help mitigate the high costs of elder housing, especially for those needing special care.
It’s smart to think strategically and plan for a multitude of future possibilities. Although nothing is certain, planning ahead helps make sure you don’t use money you need for your retirement and future healthcare. You’ll also stress less (emotionally and financially) about the care you are providing now.