3 Financial Professionals Caregivers Need
Updated on Mar 01 2019
Caregiving can have a huge impact on your emotional, physical and financial well-being. With out-of-pocket caregiving costs rising, expert financial professionals can help caregivers navigate their immediate financial responsibilities while also planning for their own retirement.
Learn more about the financial burden on caregivers and the three financial professionals every caregiver needs on their team.
3 Financial Professionals Every Caregiver Needs
While most people understand the emotional and physical toll of caregiving, many don’t realize there is also a financial toll. After all, caregiving can be expensive — especially if you are a sandwich generation caregiver — making it hard for you to prepare for your own retirement. Learn more about the burden of caregiving and why caregivers should take advantage of financial professionals’ expertise to help them stay fiscally afloat.
The Hidden Financial Burden on Caregivers
The financial impact of caregiving is often overlooked and underestimated, but it can have a huge impact on caregivers and their financial future. A 2016 report from the AARP found that “family caregivers spend an estimated $6,954 on out-of-pocket expenses annually, nearly 20 percent of their annual income”. The report also found that long-distance caregivers (defined as living more than one hour from their loved one) had the highest out-of-pocket costs, around $11,923 annually. Additionally, caregivers for adults with Alzheimer’s or a related form of dementia had higher than average care costs, which is why it’s so important to try to be proactive to financially plan for potential healthcare costs, such as Alzheimer’s or dementia care, ahead of time.
In addition to out of pocket costs, 56 percent of caregivers said they related work-related strain from caregiving duties which included cutting back work hours and taking unpaid time off. To make ends meet, many family caregivers pull money out of savings and retirement accounts while other lessen their contributions, or stop contributing altogether.
Financial Professionals and Caregivers
When it comes to navigating the financial perils of caregiving, it is important to collaborate with trusted financial professionals, such as a fiduciary financial advisor. Having a team of experts readily available can help caregivers make educated decisions that balance the immediate costs of the present with the necessary costs of the future.
These three financial professionals can help caregivers feeling the financial strain of their caregiving obligations.
1. Elder Law Attorney
An elder law attorney can help caregivers and the care recipient understand which documents are necessary for caregiving duties. Durable powers of attorney, wills, and advanced directives are just a few of the important documents that elder law attorneys can help caregivers understand and create. In cases of chronic illness or degenerative disease, like dementia, it is imperative that caregivers get these documents executed as early as possible - before their loved one is no longer able to make rational decisions and sign legal documents.
2. Tax Professional
Taxes can become more complex when caregiving. A tax professional, also known as a Certified Public Accountant (CPA), can help caregivers minimize tax obligations as income needs change, or in the event of significant charitable donations or managing estate taxes. Additionally, having a tax professional prepare your taxes can help you in case of an audit and save you money, finding deductions and tax credits that are often overlooked.
The Accreditation Council for Accountancy and Taxation is a non-profit organization that can help caregivers find tax professionals that have passed a rigorous exam and have demonstrated knowledge of taxes and the ethical standards of the industry.
3. Fiduciary Financial Advisor
Because caregivers often sacrifice their own financial security to make ends meet, they should have fiduciary financial advisor help them balance current spending with long-term planning. Fiduciary financial advisors are legally and ethically required to put your interests ahead of his or her own interests, even in the case of those interests conflicting.
A financial advisor can also help caregivers manage the finances of their loved ones and identify any pitfalls or obstacles in long-term planning.
How can a financial professional help you in your caregiving responsibilities? Contact a fiduciary financial advisor today to conduct a thorough financial assessment and take control of your financial future.
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