4 Free Steps You Can Take Today to Protect Your Financial Future


Almost every person will be a caregiver in their lifetime. When we are called to help a loved one through illness, aging, or dying, the financial strain can be significant. Almost 40% of caregivers over 50 say that they experience high to moderate strain due to caregiving and the average out-of-pocket outlay is five to eight thousand dollars per year for each person they are caring for. The good news is that there are steps you can take today, for free, that can help alleviate some of the future financial burdens of caregiving.


1) Review AARP’s Prepare to Care Guide. Expect that you will caregive and plan accordingly. Even if your loved ones do not presently have a diagnosis or need care, they may someday. Using AARP's Prepare to Care guide will get you organized to step into the all-important role of caregiver. The Prepare to Care guide has several versions, including military and LGBTQ, and offers guides in English, Chinese, and Spanish.


2) Prepare and Complete Advance Directives and Encourage your Loved Ones to Do the Same. While we encourage that you complete a comprehensive life care plan, at least start with your medical advance directives. These express what your wishes are and name people who can talk to your doctors and make medical decisions for you if you cannot, without need for court involvement. You do not always need an attorney to prepare your advance directives. AARP has valid forms for health care advance directives for all of the fifty states, on its website. Of course, always consult a professional if you have any questions or need guidance.


3) Have the Talk with Your Loved Ones. While 92% of Americans say it’s important to discuss their wishes for end-of-life care, only 32% have had such a conversation. 95% of Americans say they would be willing to talk about their wishes, and 53% even say they’d be relieved to discuss it (The Conversation Project National Survey, 2018). When the time comes, it is helpful to know what a person's preferences if their medical needs require facility or home care, what their feelings about hospice are, and what is their perspective on death in general. The Conversation Project® is a public engagement initiative with a goal that is both simple and transformative: to have every person’s wishes for end-of-life care expressed and respected. Visit their site to explore toolkits and resources for end-of-life decision making and discussions with your loved ones.


4) Create a Budget. Unpaid family caregivers can expect to spend nearly 20 percent of their personal income on out-of-pocket costs related to caring for their loved one. The best thing you can do to prepare yourself for this financial toll is to create a budget to help identify what you are able to reduce or eliminate as needed. You can download a free fill-in budget from Consumer.gov. And, consult with your advisors (financial and insurance professionals) to discuss options for incorporating caregiving into your retirement plan (and encourage your loved ones to do the same). There may be insurance policies or investments that will greatly serve you and yours in the event of a medical crisis or long-term caregiving stint.


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