My parents are getting on a bit but recently my mother has been diagnosed with Alzheimer’s disease and I’m worried about the cost of being able to look after her as her condition worsens. How can I save for my own old age whilst helping my parents cope with theirs?
You are not alone in being forced to choose between paying your own retirement and your parents. Many of us are well aware of this problem is we reach our own retirement age many others are finding themselves having to care for ageing relatives with increasing medical needs and dwindling financial resources. In the USA around 20% of the population care for someone over the age of 50 who is ill or ageing, a number that has steadily increased over the past 10 years. Caregivers have to take time off from work and dip into their own savings to pay for expenses, even more so now that state and local programs are facing budget cuts. For many the question isn’t whether they’ll face higher costs, but how they’ll manage them.
The costs can be daunting many adult children are still clawing their way back from the financial crisis and we financial advisers agree that caregivers will get stuck with some hefty expenses and are scrambling to offer ideas that will help. There has to be a balance between supporting parents and supporting yourself!
So you have to try to cover the extra costs and can start by investing more aggressively but the risks might outweigh the rewards! Perhaps it’s better to set aside a chunk of your savings for these expenses by investing in dividend paying stocks and bonds using the income for expenses rather than reinvesting it. If you have the luxury of time to plan getting parents to sign up for a long-term care insurance plan early on can curb one of the biggest costs: assisted living and nursing home fees, which can easily top BD25,000 a year. While you may be tempted to dodge these costs by leaving your job and helping out I prefer to discourage that, as in the long run it can be less expensive to continue to work and hire someone to care for the family members.
After all by giving up work and caring for a parent you run the risk of ending up in the same shoes as they – are passing on your financial burden to your kids!
