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Tuesday, June 21, 2011

How much are you saving to care for your parents?


Last week I found out about a 2008 study that MetLife published concerning the cost of being a caregiver. It is an eye opening study.

According to the MetLife study, nearly 10 million adult children over the age of 50 care for their aging parents. These family caregivers are themselves aging as well as providing care at a time when they also need to be planning and saving for their own retirement. The percentage of people over 50 who are either part or full time has more than tripled in the last 15 years. 3% of men and 9% of women provided at least basic parental care in 1994. Partially because people are living longer by 2008 that figure had increase to 17% of men and 28% of women.

People who care for their parents are more likely to cut their working hours, or to give up working totally. The study found that the cost in lost wages, pensions, and social security benefits average $283,716 for men caregivers and $324,044 for women caregivers. Women are more likely to give up their jobs to be an at home caregiver while men are more likely to offer financial support but still work part time. People 50+ who give up their jobs to care for a parent are unlikely to find the same status employment after their caretaking "jobs" are over. In today's economy it can be hard to find a job, let alone a job that paid what you previous were making. Many people are taking jobs with fewer benefits and lower pay.

In addition to the monetary costs are the ancillary costs. This includes the fact that 31% of adult caregivers report stress, anxiety, or depression; 70% report making work accommodations due to caregiving; and 53% say that they lose time with friends and family. With the declining health of the caregiver will come increased costs in medical care and medications.

You can access the study through my website.

So what is the answer?

Over half of us will need some extra care in the future. If you don't want to place this burden on your son or daughter you may want to consider getting a Long Term Care Insurance policy. This study concerns adult children. However, spouses also have similar cost to their body and soul as well as to their retirement fund.

If you are so concerned you may contact me for more information on Long Term Care. One of the worse parts of my job is having someone call me wanting information on or ideas of how to care for their parent AFTER the parent needs the care and is therefore ineligible. A Long Term Care policy will not take the place of your loving care but it can make it much easier and definitely less stressful. Long Term Care is not just for nursing homes but also can be used for adult day care and in-home care.

Remember, Medicare does not generally pay for Long Term Care. Medicare will pay for UP TO 100 days in a skilled nursing facility and is based on a continued skilled need. In addition, neither Medicare nor Medicare Advantage plans will cover 100% of this care. Also, with Medicare and Medicare Supplements there is also the requirement that you've spent 3 days in the hospital. With some surgeries you are only in the hospital overnight before you are discharged.

What is a skilled need? 

One common skilled need is rehabilitation or therapy, including occupational, speech, and physical therapies, and is usually following a surgery or stroke. Other common skilled needs are needing a feeding tube or needing wound care.

One caveat to the "skilled need". If the doctor tells Medicare that you are not going to get better and will need this care continually Medicare will then consider your care to be long term instead of short term. They will discontinue paying for the facility even though you still have some of your 100 days left.

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