Providing care for an elder can be both emotionally and financially taxing. However, good preparation, open communication, and a sturdy budget can help. In the video below, our experts at HUECU outline some critical financial steps to take when caring for an elder. Watch below and keep reading for some helpful advice.
The first crucial step in caring for an elder is setting expectations. Aging is an adjustment for both the person requiring care and their caregiver, and at times there are challenging conversations that will need to be had. Acknowledging the difficult dynamic of caring for a loved one is an important step toward effective care. Ask questions like what level of care is required,who is best suited for the role of caregiver and asking the elder how they would like to be cared for. If there are multiple children with an aging parent, will they each have equal roles in that parent’s care? What are the expectations of the person in need of care and how do they relate to the expectations of the caregiver?
Often the need for care is a long-term one, so start small — maybe begin with taking an elder to a doctor’s appointment or picking up their groceries, and slowly those responsibilities can continue to build as needed.
Things to Consider
There are a few essential things you should consider when beginning to care for an elder. The first is medical care. What resources are available to you? What level of assistance does the elder need? Think about potential expenses like doctors, home healthcare, and nursing homes, and consider which option is best for you and your loved one.
You should also be cognizant of your own emotional wellbeing. Know your options for getting support — whether it be from an employer or a local community or religious group.
Finally, there are a number of financial considerations when it comes to caring for an elder. If you’re not sure where to start, as always, setting a budget is a good first step.
Setting a Budget
When caring for an elder, there are some extra expenses that you should consider building into your budget. Of course, medical bills are likely to make up a chunk of your expenses, but consider other things such as housing needs. Will your loved one need to relocate? Or perhaps their current home will need some renovations, like moving a bedroom to the first floor or adding accessories to the bathroom to help with safety and accessibility.
As with any budget, it’s also important to make room for entertainment and hobbies. Set aside some money to travel if possible or for activities that you and your loved one will enjoy doing together. And, importantly, you should budget for the legal costs of getting an elder’s paperwork in order as well as estate planning.
When it comes to budgeting for these expenses, potential income sources can, of course, include personal funds like savings accounts and monthly salaries. However, you should also look into taking out loans or accepting government assistance like Medicare or Medicaid. If you or your loved one are a veteran, then the Veterans’ Association offers many different avenues of support.
As is mentioned above, there are certain benefit programs available to assist with elder care such as Medicare and Medicaid. The National Council on Aging offers a wealth of information on available resources in your area — everything from food and nutrition services to tax information. To find out what benefits are available to you and learn more about your options, visit benefitscheckup.org.
Getting an elder’s paperwork in order is a big part of caring for a loved one. Firstly, make sure you know what accounts the person has open. It’s not uncommon for an elder to have an account open or funds kept somewhere they’re unaware of; They may have been the beneficiary of an estate, received a tax refund or life insurance benefits, or simply just forgotten about something like a retirement account. You can check for forgotten money through abandoned property sites. In Massachusetts, you can start by visiting the Unclaimed Property Division online.
When going over an elder’s finances and paperwork, it’s important to be aware of their credit history and score. Use a secure website, along with your loved one, to pull their credit reports. Be aware of anything that looks incorrect as, unfortunately, elder fraud is a real issue.
When helping with someone else’s finances, you first need to know what accounts you have access to. If your name is not on an account, you won’t be able to process transactions or handle funds. Having an understanding of the accounts an individual holds and the roles you play with these accounts before there is a need for you to help that person put their finances in order will help relieve stress when the time comes. To have better access to someone else’s accounts, the person you care for may consider setting up an authorized user or even look into providing power of attorney to their caregiver. It’s important to consult with a financial professional such as a fiduciary when considering your options and as you begin to look at estate planning.
Talk to a Professional
Talking to financial professionals who have your interests in mind can relieve a lot of the stress of caring for an elder. Having a will in place as well as all of your loved one’s finances in order will allow you the space you need to focus on that person’s other, immediate needs. If you’re overwhelmed or not sure where to start, look to a professional. There are national resources available such as AARP, the National Institute on Aging, the National Council on Aging, and Social Security Administration, and our partners at GreenPath are also always available to talk you through any financial decisions and considerations you may have.