This Week in Your Wallet: Taking Care of Elderly Parents (Without Going Broke)
We often talk about saving for your retirement and saving for your healthcare, but today, I want to explore a different question: how do you afford caring for your elderly parents in their retirement? Better yet — is there any way to save money when caring for elderly parents?
We often talk about saving for your retirement and saving for your healthcare, but today, I want to explore a different question: how do you afford caring for your elderly parents in their retirement? Better yet — is there any way to save money when caring for elderly parents?
As anyone who has ever had to interview homecare nurses knows, caring for an ailing parent is stressful, time-intensive, and often very costly. The good news, according to this Wall Street Journal article, is there are several overlooked ways to trim the bill. Some will help your parents’wallets, some will help yours. A few of the tips:
- Do it yourself, within reason. Obviously, quitting your job to take care of your parents isn’t an instant money-saver, especially if you and your family count on your income. However, if your parents have long-term-care insurance, some policies will offer relatives by marriage a reimbursement for caregiving duties. Send your spouse in yourplace (and offer to do the same for his/her parents), keep track of the hours spent caregiving, and make your case to the insurance provider.
- Note the tax breaks. Did you know that home improvements made with a doctor’s prescription are tax deductible? Well, you do now. And according to the Journal, you can deduct “over and above the amount it increases the value of the home.” So if installing central A/C costs $4,000 and adds $2,000 to the value of your parents’ home, they can take a $2,000 deduction. (I’m using nice, round numbers here; to know how it translates to your home and life, you’ll need a professional opinion and/or appraisal before and after the renovation.)
- Run the numbers. Many families — and I’ve seen this happen to my own friends and relatives — pay for around-the-clock home care because they know their parent doesn’t want to leave his or her longtime home. (And even the adult kids can be reluctant to give up that childhood home.) However, if around-the-clock care costs $17 an hour, theJournal notes that that adds up to $140,000 per year — a cost that could be significantly minimized by moving into an assisted living facility.
Most importantly — and this isn’t in the Journal article but something I’m recommending — talk toyour parents about their wishes and their finances before you have to. It may not be the easiest conversation to start, particularly if they’re healthy and don’t need care, but it’s better to discuss expectations (financial and otherwise) while all parties are calm and coherent. And don’t just assume you know what they want: a recent survey by Fidelity found that 97 percent of parents and adult children disagree over who will be the caretaker in the event of an illness.
And now, here are the other headlines for the week:
Prepaid Cards Report
CardHub recently released its 2013 Prepaid Card Report, and there were some interesting findings. Prepaid debit cards can be a good alternative to traditional checking accounts, though you have to be careful because many carry an annual fee — sometimes as high as $360, according to the report. If you do find a prepaid debit card without an annual or monthly fee, be sure to read the fine print: some, like the AccountNow Visa Prepaid Classic, tack on charges for ATM withdrawals and purchases. (In the case of the Visa Prepaid Classic, $2.50 per ATM withdrawal and $1 per purchase.)
Also notable: after reviewing prepaid cards endorsed by Justin Bieber, Lil Wayne, Russell Simons and other celebrities, CardHub found that the celebrity-endorsed cards were anywhere from 17 percent to 36 percent more expensive than non-celebrity-endorsed cards. The lesson here? If you want a prepaid debit card, don’t pick one just because it’s associated with yourfavorite famous figure!
Summer Money, Had Me a Blast
Does your teenager have a summer job? If so: how do they like earning their own money? I remember my first summer earning money. I was a baby-sitter at a summer camp (as a precursor to becoming a full counselor, I took care of the kids of adult counselors). It was liberating to be able to pay for clothes or snacks I wanted with my own, hard-earned cash, and it helped teach me the value of working for what I wanted. I hope your kids are appreciating the lesson as well, even if the job itself isn’t quite so glamorous. I also hope that they’re saving a bit of their earnings. As this Reuters article notes, it’s important that your teen learn to save for something, whether it’s retirement (yep, it’s never too early to open an IRA), college, or even just a semester abroad. Or, if you really want to start a good financial habit, encourage your child to put money towards an emergency fund. When they’re 22 and scared about entering the job market, they’ll be grateful they built a cushion.
Have a great week!
Jean
