Caring for Elderly Parents Can Put A Big Dent in Your Budget

America is aging and this longevity is creating physical, emotional and financial burdens on both the elderly and their adult children. Despite the availability of Long-Term Care Insurance for decades, many elderly boomers do not have this coverage. This places the burden of caregiving in the hands of adult children. While your elderly parent’s pocketbook will be impacted, often so will yours.

Caregivers Face Many Challenges 

According to Northwestern Mutual’ s 2018 C.A.R.E. Study, 7 in 10 family caregivers also provided financial support. This was up from 64% last year. Some of the other findings:

• 1 in 3 current caregivers spend more than 20% of their monthly budget on providing care, with a sizeable portion going towards medical supplies. 
• Two-thirds of caregivers who have incurred costs had to reduce living expenses as a result.
• Nearly 6 in 10 future caregivers believe they will incur costs, yet almost half have not planned for these added expenses.
• 8 in 10 Current Caregivers say caregiving has affected their lifestyle. The majority of current caregivers had to choose between their personal/family pursuits and
• caregiving. They also experienced impact on their careers.

Many Don't Consider Long-Term Care When Planning for Future Retirement

Despite these concerns, only 27% of these caregivers have planned ahead for their own future needs. While Long-Term Care Insurance is very affordable, especially for those in their 40s and 50s, most have not done anything different then their elder parents had done. This means the costs and burdens of aging, at the moment, will remain with them and their adult children in the future.

The study shows planning for retirement is the biggest concern for these pre-retirees (68%) just ahead of planning for long-term care which was cited by 56% of the group. While caregiving is hard on family members, and paid care drains savings and income, many pre-retirees think a spouse, family member or adult child will become a their caregiver, although only 31% of those surveyed actually discussed this with their spouse, family member or children.

For Many Long-Term Care Insurance is Affordable Solution

The financial costs and burdens of aging will impact you, your family, your savings and income, and lifestyle. This is why many experts suggest including an affordable Long-Term Care Insurance policy to your overall retirement plan. Despite what you may read elsewhere, these policies are very affordable. The key, experts suggest, is to speak with a Long-Term Care Specialist who can design appropriate plans and suitability. The American Association for Long-Term Care Insurance (AALTCI), a national consumer education and advocacy group, says to seek a specialist who works with multiple top companies and has substantial experience in this area.

The first thing to do is find what the cost of extended care services may be in your state. Also, see if your state is one of 44 who participates in the Long-Term Care Partnership Program. These qualified policies provide additional dollar-for-dollar asset protection. Tax incentives may also be available. Plus, the LTC NEWS cost of care calculator will allow you to see the current and future cost of long-term care services where you live.