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Caregiving responsibilities often fall on women. According to the latest statistics available, an estimated 66% of caregivers are female, and a female caregiver may spend 50% more time caring for her than a male caregiver.. The amount of time required to devote to care (average 20 hours per week) is something women need to consider before assuming this role, but the economic implications must also be considered.
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In this “Financially Savvy Female” column, Arvette M. Reid, Director of Client Services, Lifecare Affordability Plan, explores the financial aspects women need to consider before committing to being a parental caregiver, and other considerations. You may have options.
What are the money issues women should consider before caring for an aging parent?
You may want to take on the role of caregiver, or it may be a last resort before hiring a professional caregiver. Regardless of the situation, one of the first decisions you will always make is whether to continue working full-time or part-time while providing care.
Research shows that the cumulative lifetime earnings gap for women is due in part to lower salaries and time spent away from the workforce to care for children, aging parents, or sick spouses. It is shown that there is This will result in fewer Social Security payments for life. The average woman spends 44% of her adult life outside the labor force, compared to 28% of hers for a man.
Important questions to ask yourself include: How much? Where would you adjust your budget to account for the deficit? If you are still working, what plans do you have because your parents will need more help over time?
Another point to consider is that women tend to live longer than men. As a caregiver for your adult daughter, make sure you have a realistic understanding of your caregiver timeline, especially if you plan to hire other caregivers to assist you during work hours.
Studies show that because women live longer, the average woman is more likely to have higher health care costs than the average man in retirement. She also pays $195,000 for living longer, having more health problems in old age, and relying on formal long-term care in later life.
If a woman unexpectedly has to take on the role of caregiver, what steps can she take to ensure that this does not create financial problems?
Women should align caregiving with their values, priorities and interests. If you accidentally become a caregiver, you first need to “talk”. It is in your best interest to have open discussions about money with your parents and spouse. Conversations can be uncomfortable, but financial issues can be worked around before they become overwhelming.
Then organize.collect all documents [that involve] money [or are] Anything related to money, such as investments, annuities, wills, trusts, life insurance, powers of attorney. This is the best way to get a complete picture of your finances and your parents’ finances.
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Third, educate yourself about the costs of long-term care. It’s not ideal to do this after becoming a caregiver, but learning sooner or later will prepare you for what’s coming next. Or plan a visit to a nearby assisted living community to get an idea of current prices and what’s there.
Finally, surround yourself with your team. Having a team of experts familiar with many care options is essential to guide you in determining affordable care options for your parents. I told my client that any long-term care plan should include medical, legal, and financial professionals. communication.
How can women best plan their finances to ensure that they are cared for by their parents without sacrificing their own financial well-being?
Financial planning can seem overwhelming when you’re in the sandwich generation.You’re not alone! According to the Pew Research Center, 54% of Americans in their 40s are caring for aging parents and children. While helping take care of your parents may be your priority, it’s imperative that you keep track of family care and retirement planning.
According to Bienvenue Wealth, “Set healthy financial boundaries. Decide what you pay and don’t pay and don’t be afraid to communicate those guidelines to your family. and long-term impact, prioritize your goals first so you can help others.” is important.
For example, if you quit your job to take care of your parents, how would you supplement that income? Some states have programs that allow families to receive modest reimbursement for caregiving.
However, it is important to note Fidelity’s example of 56-year-old Laura. She left her $70,000 a year job to take care of her mother for her three years. She lost $216,000 in salary and she lost $67,000 in Social Security benefits, totaling her cost of $283,000. She also lost the opportunity to contribute to her 401(k) plan and receive her contributions from her employer. All these factors should be considered when creating a new financial plan for your caregiving role.
What other options do I have if I can’t afford to be a caregiver?
If you can’t afford to be a caregiver, do yourself a favor. Caregiving should match the practical nature of your life and what you are able to give emotionally, mentally and financially. Check out the resources available, such as meals and fellow volunteers. There may be affordable programs that provide some activity or supervision for a few hours each day. Accredited attorneys can be found through the National Academy of Elder Law Attorneys.
Learn more about GOBankingRates
GOBankingRates wants to empower women to manage their finances. According to the latest statistics, a woman owns $72 billion in private property, but fewer women than men consider themselves to be in “good” or “better” financial condition. Women are less likely to invest, more likely to be in debt, and women are still paid less than men overall. Our “Financially Savvy Women” column explores the reasons behind these inequalities and offers solutions to change them. I believe. That’s why we provide women with tools and tips to help them manage their money and live more prosperous lives.