Caring for Aging Parents
The increase in average life expectancy in the United States has caused a shift in family dynamics. As your parents age, you may find yourself in the role of caregiver. Caring for aging parents can include emotional support, assistance with daily tasks, and getting them the best medical care. Before you take on the role of caregiver, there are some basic things you should know about the finances behind this undertaking.
1. What is the Cost?
Caring for parents can put a large financial burden on adult children. According to the U.S. Department of Health and Human Services, the average cost for long-term assisted living care is more than $3,000 per month. Nursing homes can be even more expensive. Research the benefits provided by Medicare, Medicaid, and your parent's private health insurance to determine the expenses are covered under their existing policies. If the cost of your parents' care is more than their insurance covers, you may have to make up the difference.
2. Find Financial Assistance
If caring for your parents is causing financial strain, there are resources to help. The IRS offers tax deductions and credits for adults caring for aging parents and supporting them financially. You must provide at least 50 percent of the support for your parent before listing them as a dependent on your tax forms, according to the IRS.
An elderly parent does not have to live with you to qualify as one of your dependents. Other deductions and credits are also available. For example, a credit is available if you cover the costs of your parent's elderly day care.
3. Get Help From Your Employer
Many companies now offer assistance to employees acting as caregivers. You should ask your employer if they offer benefits such as flexible scheduling or telecommuting, which would give you more time at home to be with loved ones or finish your work at your own pace. Additionally, if you need extended time off from work to care for your parents, you may be eligible for unpaid leave as specified in the Family and Medical Leave Act, according to the Department of Labor.
When the time comes to help out your aging parents, it's important to first understand exactly what care they'll need and how much that care will cost. Once you do that, you can create a plan to ensure your parents receive good care, while minimizing the impact on your finances.