There are no two ways about it -- getting old is expensive. Just how expensive, of course, will depend on factors such as disease and mobility. For caregivers, figuring out what Medicare, Medicaid and insurance benefits their aging parents are eligible for is akin to being stuck in a never-ending maze with signs printed in different languages. It can be frustrating for aging adults to see that a life of hard work isn't enough to pay for a nursing home. Some aging adults elect to use up their savings so that they are eligible for Medicaid, while others may pinch pennies and go without in order to be able to leave their children something in their wills.
Caregivers often have to assume the financial responsibilities for their parents; the first step of this process involves a fact-finding mission. Caregivers should create a list of income sources, assets, debts and liabilities -- the whole shebang. Coupled with insurance policies and Medicare/Medicaid information, a financial picture should start to emerge, which will provide the caregiver some direction on money matters. Caregivers may also need to research financial assistance their aging parents may be eligible for, either from the government or community groups. For example, aging adults may be eligible for utility company discounts or could attend senior center-sponsored health fairs to get free screenings.
Unfortunately, caregivers are usually trying to make heads or tails of their parents' financial situation while taking a hit on their own money matters. Some caregivers have to cut back on work hours or even quit their job in order to care for an aging parent, and when you consider the loss of employee-sponsored health insurance or a 401(k) match, it's estimated that caregivers lose out on more than $600,000 over the course of their lifetimes [source: Fetterman]. Though many companies offer parental benefits such as maternity leave, few extend elder-care benefits.
While caregivers lose out on income and benefits, they're simultaneously losing money out of their own pocket. If a parent and caregiver live under the same roof, there's the costs of additional food, minor modifications to the home or the price of gas to travel to and from doctor's appointments. It's impossible to add up all the costs of having a parent live with you, but the AARP estimates that caregivers who put in more than 40 hours a week of care spend an average of $3,888 of their own money each year on their parents, while those who provide a lesser amount of care pay out $2,400 a year [source: Fetterman]. And time is money: The AARP also estimates that the economic impact of all that "free" care provided by children was worth $350 billion in 2006 [source: Fetterman].
We'll have to add to that cost of aging when we consider legal issues on the next page.