Caregivers Must Also Care (Financially) for Themselves

If you’re a caregiver, possibly for a loved one dealing with an illness such as Alzheimer’s disease, you’re probably already facing some significant emotional and physical challenges—so you don’t need any financial ones as well. Yet, they are difficult to avoid. What steps can you take to deal with them?

First of all, you may be interested in knowing the scale of the problem. Consider these numbers from the Alzheimer’s Association: About 5.8 million Americans ages 65 and older are living with Alzheimer’s disease, and in 2019, caregivers of individuals with Alzheimer’s or other dementias contributed more than 18 billion hours of unpaid care—worth about $244 billion in services. Furthermore, about two-thirds of caregivers are women, and one-third of dementia caregivers are daughters.

But whatever your gender or relationship to the individuals for whom you’re providing care, you can take some steps to protect your own financial future. Here are a few suggestions:

• Evaluate your employment options. If you have to take time away from work—or even leave employment altogether—to be a caregiver, you will lose not only income but also the opportunity to contribute to an IRA and a 401(k) or other employer-sponsored retirement plan. But you may have some options, such as working remotely, or at least working part time. Either arrangement can give you flexibility in juggling your employment with your caregiving responsibilities.
• Explore caregiving pay possibilities. Depending on your circumstances, and those of the loved ones for whom you’re providing care, you might be able to work out an arrangement in which you can get paid something for your services. And as long as you are earning income, you can contribute to an IRA to keep building resources for your own retirement.
• Keep making the right financial moves. As long as you’re successful at keeping your own finances separate from those of your loved one, you may be able to continue making the financial moves that can help you make progress toward your own goals. For example, avoid taking on more debts than you can handle. Also, try to maintain an emergency fund containing three to six months’ worth of living expenses, with the money kept in a liquid account. Of course, these tasks will be much easier if you can maintain some type of employment or get paid for your caregiving services.
• Protect your financial interests—and those of your loved ones. You may well want to discuss legal matters with the individual for whom you are a caregiver before Alzheimer’s robs them of the ability to think clearly. It may be beneficial to work with a legal professional to establish a financial power of attorney—a document that names someone to make financial decisions and pay bills when the person with Alzheimer’s no longer can. And whether you or someone else has financial power of attorney, the very existence of this document may help you avoid getting your personal finances entangled with those of the individual for whom you’re caring.

There’s nothing easy about being a caregiver. But by making the right moves, you may be able, at the least, to reduce your potential financial burden and brighten your outlook.