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Handling the High Cost of Caring for Aging Parents While Raising Your Kids

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They’re often called the “sandwich generation,” squeezed between the costs and pressures of raising their own kids while caring for aging parents. If you’re a member of the sandwich generation, the name must seem especially appropriate. Today’s 40 or 50-year-old can very likely have parents in their 80s and kids in their teens or younger, with all the effort and stress those twin roles can bring.

We recently discovered this article from the financial site NerdWallet in which writer Kate Ashford addresses the challenges of caring for aging parents and growing kids. We hope these tips provide some encouragement as you deal with all the pressures your “dual roles” entail.

Caring for Aging Parents and Growing Kids Brings Anxiety

 Ashford begins her article with some startling stats: “Nearly a quarter of millennials are caregivers for an adult, according to a 2020 AARP survey. And a 2020 report from insurance marketplace GoHealth found that 1 in 3 millennials are supporting their parents financially, and more than a quarter help manage their parents’ health care.”

In practical terms, this means that many millennials are caring for young children as well as caring for aging parents, grandparents, or other aging loved ones. “That can take a toll,” Ashford writes. “Eighty-two percent of millennials worry about having enough money to support both their parents and themselves, according to GoHealth.”

If you’re in this sandwich generation and faced with a new financial landscape, resources are available to lessen the burden. Ashford gives us the following sources to help with such costs.

Caring for Aging Parents: Determine Available Resources

If you’re dealing with the costs of caregiving for a parent, the first place to look for assistance will be to see if they have any form of long-term care insurance. This coverage can help with either in-home care costs or assisted living and/or nursing home expenses.

“I’ve talked to a lot of caregivers who didn’t even know their loved ones had long-term care policies,” says Amy Goyer, AARP’s caregiving expert. “That can be very, very helpful.”

A reverse mortgage is also a possibility, if the person you’re caring for has enough equity in their home and they’re 62 or older. “A reverse mortgage provides a loan or line of credit based on equity in a home. But it’s not right for everyone,” Ashford writes.

“I always recommend talking to a financial advisor, especially someone who has a lot of experience with reverse mortgages, before you get into one,” Goyer says.

Caring for Parents and Kids: Explore Available Tax Strategies

Federal tax credits and deductions are often available for those who can claim their aging parent or loved one as a dependent, meaning they’ve provided over half of their financial support for the year.

“The child and dependent care tax credit can apply to seniors,” says Jill McNamara, senior director of online care marketplace Care.com. “This opens the opportunity for caregivers to save annually on their expenses related to in-home care or adult day care services. Additionally, there is the credit for other dependents, which allows caregivers access to a $500 credit.”

This can extend to medical expenses, too. Ashford explains, “If you’re paying your loved one’s medical expenses, you’re also eligible to deduct medical costs that exceed 7.5 percent of your adjusted gross income. This includes health care, prescription drugs and transportation for medical care, among other things. (See IRS Publication 502 for a full list.)”

Caring for Aging Parents: Investigate Government Assistance

Is your loved one a veteran? It’s worth checking to see if they are eligible for benefits through the Department of Veterans Affairs (check caregiver.va.gov). These benefits may include access to health care, medical equipment, and even home modifications.

“My dad was able to get all of his medications without a copay,” says Goyer. She also received help setting up hospice care for her father and getting a household ramp installed. “Never assume they won’t qualify. Keep asking the questions and find out. We got incontinence supplies, which is a huge expense,” she adds. 

Caring for Aging Parents: Medicaid Requires Careful Planning

If your loved one has a low income, Medicaid can help. But do your research; every state’s rules are different. 

“A note of caution: If you’re caring for a parent, don’t combine your money with your parent’s money,” Ashford warns. That’s because doing so can disqualify your parent from benefits.

“If a parent is ever going to need Medicaid, Medicaid has a lookback period,” says Pamela Wilson, a caregiving expert and speaker. “They don’t like combined accounts.”

Ashford continues, “A person needs to have a very low income and/or limited resources to qualify for Medicaid. If levels aren’t low enough, you may be able to plan a strategic spend-down of assets. Goyer recommends talking to a certified Medicaid planner (you can find one at cmpboard.org) or an eldercare attorney for advice.” Contact us and we’d be glad to assist you in your planning.

Caring for Aging Parents: Community Help to the Rescue

Thinking local can apply to caregiving, too. State or city programs local to your loved one could help with prescription drug costs, doctors’ bills, groceries, and other expenses.

“AARP offers links to state-by-state benefits available, and you can also check with your area agency on aging,” Ashford writes. “Caregiving advocacy organizations can be helpful. The Caregiver Action Network offers free advice by phone, email or chat at caregiveraction.org.”

The Caregiver Action Network’s CEO, Marvell Adams Jr., says, “Someone could call our help desk and say, ‘I just realized my mom’s copays for her prescription drugs have really eaten up a lot of her savings and she’s having difficulty paying them.’ And we say, ‘We can connect you with a copay assistance foundation.’”

Also of note, The National Council on Aging offers a Benefits CheckUp tool to screen for eligibility for hundreds of programs that can help with costs.

When Caring for Aging Parents, Talk to a Professional

Consulting with a financial planner is always a good first step to make sure you’re making the right decisions for your unique situation – and for the health of your financial future, too. “As a caregiver, we start paying for things and we get ourselves into a difficult situation,” Goyer says.

Ashford advises using two different planners. “I think it’s helpful to have someone who’s really looking at your picture,” Goyer says, concluding the article. “And help[ing] you make hard decisions that will, in the long run, protect you as a caregiver.”

Breaking News: Rajiv’s New Book is Here!

We have big news! The long-awaited book by Rajiv Nagaich, called Your Retirement: Dream or Disaster, has been released and is now available to the public.  As a friend of AgingOptions, we know you’ll want to get your copy and spread the word.

You’ve heard Rajiv say it repeatedly: 70 percent of retirement plans will fail. If you know someone whose retirement turned into a nightmare when they were forced into a nursing home, went broke paying for care, or became a burden to their families – and you want to make sure it doesn’t happen to you – then this book is must-read.

Through stories, examples, and personal insights, Rajiv takes us along on his journey of expanding awareness about a problem that few are willing to talk about, yet it’s one that results in millions of Americans sleepwalking their way into their worst nightmares about aging. Rajiv lays bare the shortcomings of traditional retirement planning advice, exposes the biases many professionals have about what is best for older adults, and much more.

Rajiv then offers a solution: LifePlanning, his groundbreaking approach to retirement planning. Rajiv explains the essential planning steps and, most importantly, how to develop the framework for these elements to work in concert toward your most deeply held retirement goals.

Your retirement can be the exciting and fulfilling life you’ve always wanted it to be. Start by reading and sharing Rajiv’s important new book. And remember, Age On, everyone!

(originally reported at www.nerdwallet.com)

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