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Making a Family Plan for Caregiving

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With more than 43 million adults providing care for a family member or friend in the last twelve months alone, it is clear that as a nation we need to learn how to do a better job of taking care of our caretakers. A Rand Corp. report values the amount of unpaid caregiving for the elderly in our country at $522 billion. That's more money than would be needed to retire the 2015 federal budget deficit.

Kiplinger's recent article, "How to Support a Caregiver," reports that not only do caregivers provide mostly free care, but they also frequently sacrifice their own financial security in the process. The majority of care­givers are women, and for them, the total cost of caregiving amounts to an average of $324,040, according to a MetLife study: $142,690 in forgone wages, $131,350 in lost Social Security benefits, and $50,000 in reduced pension benefits. It doesn't reflect forfeited career opportunities or the expenses caregivers cover out of pocket—several thousand dollars or more a year.

For all their efforts, most people don't think of themselves as caregivers. Rather, they think it's just something you do as family. They don't know there are resources for them. Caregiving does not have to be done as a solo enterprise. Here's how to find help.

The job of caregiving often falls on the child who lives closest to the parent or on the child who is single. Daughters are more likely to provide basic care, according to the MetLife study, and sons tend to contribute financial support. Discuss roles with your siblings as soon as you realize that your parent or elderly relative needs help. Set up a family meeting—by Skype, Face Time, or via conference call and have a social worker, mediator, or care manager facilitate the discussion. He or she, as a neutral party, can identify assignments for each of you and help the family navigate emotions that often arise when ailing parents are involved.

During the call, discuss how caregiving and related expenses will be covered and treat it as a business proposition. If you're the primary caregiver, your family might agree to pay you as an independent contractor. If so, it's good to have a formal contract, known as a personal care agreement, to detail the terms of the arrangement. Or your parent might pay you—either from income and savings or by adjusting his or her estate plan to give you a bigger piece of the pie. Whatever the plan, get buy-in from your siblings right away.

Even with your siblings' help, you may need more help. You might want to have someone stop by your parent's place to fix meals or to provide transportation. A local area agency can provide direct support to caregivers, including respite care (usually on a limited basis), counseling and emergency assistance. They can also connect you with local providers for such services as home-delivered meals, transportation, and help with chores. Some of these services may be free, but if a volunteer isn't available, check out caregiving agencies. If you need a supervised setting for your relative while you're at work or so you can take a break, look at adult day care. They offer meals, supervised outings, and sometimes health services. Consider hiring a geriatric care manager if your parent has complicated needs or lives out of state.

Remember that Medicare doesn't pay for personal or homemaking care, but it does cover home health care for people who are homebound and intermittently need skilled nursing or physical or occupational therapy. The services must be part of a plan that is established and reviewed by a doctor, and they must be provided through a Medicare-certified home health agency. Medicaid has specific income eligibility rules, which vary by state.

Long-term care insurance also pays for in-home care, but you may have to wait up to 120 days, depending on the policy, before coverage starts.

Your ability to balance caregiving and your day job may depend on your boss. Recently, some employers have begun programs that educate employees on elder-care resources and create a more receptive atmosphere for discussing work accommodations like job sharing.

The stress of working a full-time job while caring for an elderly relative can be overwhelming, and if you're considering quitting your job, try to work at least long enough to vest in your pension or 401(k) plan (which may require vesting for employer contributions) or to accumulate enough credits to qualify for Social Security. Prepare a budget for paying expenses after you leave your job. Rather than quit altogether, see if you can switch to part-time status, and be sure to find out how this would impact your benefits.

As with so many estate planning and later-in-life topics, having a conversation about how to handle all of this while the future care recipient is still healthy and well is the best way to start. How will the cost of caretaking be paid for? Who will share the burden of time that is needed? Planning in advance may not solve all of the problems, but it can help.

Reference: Kiplinger (January 2016) "How to Support a Caregiver"

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