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6 Ways Being a Caregiver for An Aging Parent Can Take a Financial Toll


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When it’s necessary to take care of Mom or Dad as they age, maybe you’re ready to step up with hands-on care or financial contributions. If so, you’re not alone.

Around 68% of family caregivers taking care of an older parent or other adult contribute directly to that person’s expenses or provide financial support, according to “The journey of caregiving: Honor, responsibility and financial complexity,”[1] a report from Merrill Lynch Wealth Management and Age Wave.

In fact, 53% of women and 48% of men surveyed in the report said they believe it’s an adult child’s responsibility to pay for costs of care. That responsibility can exact a heavy price, however.

Many caregivers report significant costs in terms of their finances, health, time and leisure, work and other relationships, says the report.

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1. Reduced Income

Taking your parent to doctor’s appointments or leaving work early to tend to medical emergencies can reduce your pay and shrink your number of available paid time off (PTO), vacation and sick leave hours.

Six in ten caregivers of adults reported making a workplace accommodation due to family caregiving responsibilities in “Caregiving in the U.S.,”[2] a report by AARP and the National Alliance for Caregiving.

Accommodations included cutting back on working hours (49%), taking a leave of absence (15%) or receiving a warning about performance or attendance (7%).

Find out: 6 Surprise Costs That can Drain Retirement Savings

2. Missed Promotions

Around 5% of survey respondents in “Caregiving in the U.S.” reported turning down a promotion because of caregiving responsibilities. Your employer may even resent the time you spend away from work due to caregiving duties, lessening your chances of being offered a promotion and a higher salary.

Two in five caregivers (40%) feel that being a caregiver has strained their relationship with an employer, and 8% were passed over for promotion as a result of caregiving duties, according to “The Many Faces of Caregivers: A Close-Up Look at Caregiving and its Impacts,” a report from Transamerica Institute[3].

3. Financial Sacrifices

The Journey of Caregiving report found that 71% of caregivers said they make sacrifices as caregivers, specifically when it comes to time and energy, money and work. Those contributing to a parent’s or in-law’s expenses also reported “making trade-offs” in order to pay for care, the most common being cutting back on their own expenses.

4. Changing Retirement Plans

The financial implications of caregiving over time can negatively impact your future retirement, according to the Transamerica Institute report[3]. At an age when most people are nearing or trying to save more for retirement, nearly one in five (18%) caregivers reported taking a loan, hardship withdrawal and/or early withdrawal from their retirement accounts.

Caregiving responsibilities may even force you to leave the workforce early. Around 8% of respondents in the Transamerica survey said they retired early, and 7% quit a job as a result of becoming a caregiver.

Find out: 10 Pros and Cons of 401(k) Loans You Should Know

5. Out-of-Pocket Expenses

Family caregivers, on average, incur more than $7,200 per year in out-of-pocket costs, according to Family Caregiving and Out-of-Pocket Costs, a study from AARP. Those respondents who juggled both caregiving and work responsibilities spent $10,525 annually.

Out-of-pocket costs may include household expenses, home modification, mortgage payments, doctor co-payments, prescriptions, personal care expenses and even pet care.

6. Credit Card or Other Debt

Almost half of caregivers (49%) in the Transamerica survey cited as a financial priority. More than 40% reported they are currently “just getting by” while 26% are still paying off a mortgage and 13% still have student loan debt. Yet out-of-pocket expenses related to caregiving can add even more to a caregiver’s current debt.

For example, caregivers may charge prescriptions, doctor visits, groceries and other expenses to a credit card or make smaller payments towards debt they already have. Long-distance caregivers may use credit cards to pay for airfare, hotels and other travel expenses.

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