Caring for a Sick Child or Parent in Retirement

The following is a 3rd party contribution.

About 43 million people provided care to a sick loved one during the last year. For these caregivers, retirement doesn’t mean the end of work—just the end of a steady paycheck. Leaving your job can ease some of the stress of caregiving, but retirement when you’re committed to caring for another person can be frightening. How will you have enough money? How will you know when you have enough? Here are the steps you need to take to care for yourself and your loved one.

Get Clear Medical and Financial Advice Before You Retire

A million dollars might sound like a lot of money, until you consider the costs of health care, in-home aides, and nursing facilities. Don’t set an arbitrary financial goal without first talking to a financial advisor. Equally important is getting competent medical advice from your loved one’s health care provider. It may be difficult to think about, but you need a reasonable assessment of how long your loved one might live, and how his or her needs might change over time. Providing your financial advisor with this information can help you set reasonable goals and steadily budget to meet those goals.

Don’t Neglect Your Own Financial Needs

Airlines always advise passengers to put on their own oxygen masks before helping others. The same strategy holds true for financial planning: if you’re in dire financial straits, you’ll be unable to help your loved one. That might mean making some difficult financial decisions. You might be unable to pay for the luxury nursing home or the fancy new electric wheelchair, particularly if doing so means scaling back your retirement savings. But these small sacrifices will help ensure you have enough money to care for both yourself and your loved one when you’re no longer working.

Look Into Alternative Funding Sources

When medical bills escalate out of control, it might not be possible to fund all of your expenses with a retirement account. If you own your own home and are over the age of 62, consider a reverse mortgage, which gives you access to tax-free money that you can spend as you wish. You don’t have to repay the money as long as you continue living in your home. This can free up valuable resources for other expenses, while giving you the money you need to protect yourself and your loved one.

Max Out Retirement Contributions

If your employer matches your retirement contributions, that’s free money. You can’t afford to turn this money down when you’re saddled with caring for yourself and a loved one. Max out your retirement account contributions, even if it means scaling back on other items, such as family vacations. There’s time for that in retirement, but as long as you’re working, you need to focus on socking away the funds you need to provide for your family. 

Look Into Long-Term Care Options

If your loved one has a progressive disease, you might need to look into long-term care options—particularly if you are caring for a child who may outlive you. Look into your options now, while you still have time to save, and if your loved one may outlive you, take out a generous life insurance policy while you’re still young and healthy. Your financial advisor may be able to help you explore other long-term care options, such as long-term care insurance, a trust fund, and even government grants for people with disabilities.


4 thoughts on “Caring for a Sick Child or Parent in Retirement

  1. Good info, particularly for those considering early retirement. I would suggest a reverse mortgage should be the last option – but it is an option. Even top line medical insurance has coverage gaps. As an example, I survived five strokes and required 6 months of speech, physical and occupational therapy. The one share of BRK-A I was saving for a rainy day – well let’s just say it served it’s purpose. Therapy is generally covered at 50%. Then there are the deductibles. Don’t forget to budget in transportation – I will not likely ever drive again. Not to be all doom and gloom – but certainly a topic that should be considered.

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