Many Canadians today are faced with the challenge of caring for an aging parent or family member. A Statistics Canada study found that one in four Canadians provides care or help to a family member or friend with a long-term health condition, a physical or mental disability, or an aging-related need ¹.
Taking on the caregiver role for a senior can be especially stressful for middle-aged Canadians, who are often sandwiched between their careers, raising children and fulfilling financial obligations, on the one hand, and providing care for aging parents or other family members on the other.
Caregiving is a challenging role that can have a major impact on your financial and emotional health. Taking the steps now to prepare a thoughtful plan can help you provide your loved ones with the personal and financial support they need. The reward is that you’ll be giving your parents a more independent and enjoyable life while creating peace of mind for yourself.
Here are five steps to help your aging parents with finances during the transition to caregiving.
5 Tips for Helping Aging Parents with Finances
- Make sure to have important conversations sooner rather than later.
Getting a conversation started with your other family members before a care crisis occurs will make it easier to manage the situation. If you want to be prepared for the unexpected, your best bet is to have a conversation with your parents about their intentions for the future. They may need help making financial decisions as they age, so it’s important that you understand their financial plan for retirement.Although it may be easier to avoid the conversation, the longer you wait, the more emotionally charged it will become and the less time you’ll have to create an action plan. Including other family members in the discussion helps to ensure everyone’s wishes are respected and that everyone is on board with your parents’ plans. The topics could include choosing a primary caregiver, talking about family dynamics, organizing an estate plan, and managing your finances.
- Learn about your parents’ financial situation.
Preparing yourself for potential financial problems in the future is easy, if you have a basic understanding of your parents’ financial situation. From the number of bank accounts they have to where legal contracts are stored, you should make a list of your parents’ financial resources. It’s helpful to know where your parents keep their assets and how much they have, so you can help them if they need financial assistance.If your parents are concerned that they might not have enough money to live comfortably in retirement, they may need to look into adjusting their investment strategy, retirement savings or perhaps even deciding whether or not to take pension payments early. Experior Associates can help you with all of your financial needs, and we would be happy to discuss this more with you! Experior Associates can help you with sourcing tax advice to find out about tax credits and benefits that apply to caregivers, like the Compassionate Care Benefit, the Canada Caregiver Amount, the Disability Tax Credit and the Home Accessibility Tax Credit. Our knowledgeable Associates can also provide information about other resources that can help you manage your financial responsibilities as a caregiver.
- Be prepared to deal with unexpected costs.
As we get older, health insurance costs can rise significantly. According to a study done by Environics Analytics, one in eight Canadians require help as a result of a long-term health condition between the ages of 65 and 74, but this figure jumps with age. About 37% of women and 24% of men age 85 and over are living in a retirement or nursing home.²Even if you don’t plan on using a long-term care facility for your parents, talking to a care advisor can help you determine the type of living situation that best suits them. Living arrangements in assisted living and home accommodations/services can be expensive, but they can also offer unique benefits not available at other types of accommodations. Costs vary depending on the services required and by province. It’s important to save money in an emergency fund so that you can take unpaid leaves of absence or modify your work schedule to care for aging parents. It will also provide you with peace of mind by knowing that you won’t need to rely on credit cards or loans to cover unexpected expenses.
- Take steps to ensure that your parent’s estate and will is in order.
The vast majority of Canadians do not have a Will and do not plan for the distribution of their estate. This can lead to family conflict, legal problems and additional expenses. When there is no executor, delays and unnecessary expenses can accumulate. The deceased’s wishes may go unfulfilled and lead to family conflict.When you and your parents plan in advance, your family can pay less in taxes and make sure their assets go to the people they want. If your parents already have a will and a power of attorney, be sure that these documents are up-to-date and easily accessible in case you need to access them.
- Consider your own goals as a caregiver.
You may have trouble setting your goals in the face of caring for others, but if you plan ahead you will be able to accomplish both yours and theirs. To be effective in helping others, you must ensure your own financial future and needs are taken care of. Take the time to take an inventory of your income and expenses, Wills, and build contingencies into your financial plan for future care needs, including plans for providing care for someone else.
Why Choose Experior Financial Group?
Whether you are looking for financial information on insurance policies, retirement savings or building your investment strategy, Experior Associates can help you create a plan for you and your family’s future that will provide you with peace of mind. Our Associates will provide you with a free financial analysis. The Expert Financial Analysis is provided with no hidden costs and gives you a clear and accurate picture of your current finances. A step-by-step plan that shows you how to achieve your financial goals. Contact one of our Associates today to learn more!
1 Statistics Canada, General Social Survey – Caregiving and Care Receiving, 2018.
2 There is Money on the Table: Challenges and opportunities of marketing to an older population, Environics Analytics, April 2019.
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