Nearly 50 million Americans are serving as caregivers to someone over the age of 50, often their parents, according to the AARP and National Alliance for Caregiving report Caregiving in the U.S. (2020). That’s roughly one in seven adults. And most of them didn’t plan for it.
This article is for educational purposes only and is not intended as personalized financial, tax, or legal advice.
The statistics paint a picture that’s hard to ignore. Seventy-five percent of these caregivers are women, many of whom also hold full-time jobs and are raising families of their own. The average family caregiver spends more than $1,980 per year on care-related costs, according to the same AARP report, and many reduce their work hours or leave their jobs entirely. Some deplete their own retirement savings to cover a parent’s expenses.
Most families wait until a crisis forces their hand. A fall. A diagnosis. By then, the decisions come fast, the emotions run high, and the financial costs multiply. There is a better path, and it starts well before anything goes wrong.
Assess What Independence Looks Like Today
Planning for a parent’s future care begins with understanding their present. That means paying close attention to how they’re managing right now, not in a general sense, but in the specific, day-to-day details that reveal capacity.
If your parents live alone, spend time observing how they handle home responsibilities. Are bills getting paid on time? Is the house maintained? Are there expired medications in the cabinet, or have they stopped visiting the doctor? These small signals often appear months or years before a major health event.
Take stock of their medical situation. Do you know their current medications, their primary care physician, their specialists? If something happened tomorrow and you had to step in, would you know where to start?
You’re building a baseline, not conducting surveillance. When you understand what “normal” looks like for your parents today, you’ll recognize meaningful changes when they begin.
Address the Financial and Legal Questions Early
Talking to your parents about money and legal documents can feel uncomfortable. Many adult children have little visibility into their parents’ finances, and raising the topic can seem intrusive. But these conversations grow more difficult with time, not less.
Start with the practical questions. Do your parents have a financial advisor? If so, do you know who it is? Is there a plan in place that accounts for the possibility of long-term care? Are their wills, powers of attorney, and healthcare directives current and accessible?
If the answer to any of those questions is “I don’t know,” you’re not alone. Many families discover gaps in documentation only after a health event forces the issue, and by that point the options are narrower and the stakes are higher.
Powers of attorney deserve special attention. A financial power of attorney allows a designated person to manage financial affairs if your parent becomes unable to do so. A healthcare directive (sometimes called a living will) documents their wishes for medical treatment. Without these documents, families may face court proceedings to obtain authority during a time when their focus should be on care. A qualified estate planning attorney can help ensure these documents are properly drafted and comply with your state’s requirements.
These conversations help get everyone aligned. When the whole family understands the plan and knows where to find the documents, you’re better positioned to respond when circumstances change.
Research Long-Term Care Options Now
According to the Administration for Community Living (based on data reported as of 2020), roughly 70% of people who reach age 65 will need some form of long-term care services during their remaining years. That statistic alone makes this worth thinking about well in advance.
Long-term care can take many forms. In-home aides, assisted living communities, memory care facilities, skilled nursing. The costs vary widely by geography and level of care, and they can add up quickly. Families who research options before they need them tend to make more informed decisions, with less financial strain and less emotional weight.
If your parents have long-term care insurance, now is the time to review the policy details. What does it cover? What are the benefit triggers? Is there a waiting period before benefits begin? Understanding the specifics before a claim is filed can prevent costly surprises.
If they don’t have long-term care insurance, that’s worth knowing too. It changes the planning picture. Depending on their financial situation and health, there may be other approaches to consider, though each involves trade-offs in cost, flexibility, and coverage. A financial advisor can help evaluate the options in the context of a broader financial plan.
Don’t Overlook the Caregiver’s Finances
One aspect of eldercare planning that often gets missed is the financial impact on the caregiver. Reduced work hours and career interruptions can compound over years, especially when paired with ongoing out-of-pocket costs. For caregivers who are also saving for their own retirement, the long-term effect on their financial plan may be significant.
If you anticipate becoming a caregiver, consider how that role could affect your income and your savings rate over time. It may also shift your retirement timeline. Building some flexibility into your financial plan now can help absorb the impact later.
A Framework for Getting Started
If this feels overwhelming, a simple starting point can help. You don’t need to solve everything at once.
Start with one conversation this month. Ask your parents about their legal documents. Are the wills current? Is there a power of attorney in place? If they’re not sure, that’s useful information too.
Next, compile a list of their doctors, medications, insurance policies, and financial accounts. Store it somewhere the family can access when needed. This shared reference becomes invaluable when decisions need to happen fast.
From there, research long-term care options in their area. Understand the general cost ranges. If they have long-term care insurance, read the policy. And if you have siblings or other family members involved, loop them in early so the planning doesn’t fall on one person.
None of these steps require making a final decision. They require gathering information, and that alone puts your family in a stronger position.
Key Takeaway
Caregiving conversations are difficult, and it’s natural to postpone them. But families who plan ahead, even modestly, tend to face fewer financial surprises and feel more confident in their decisions when the time comes. The best moment to start is before you need to.
If you have questions about how eldercare planning fits into your broader financial picture, consider speaking with a financial advisor who can help you think through the options for your specific situation.
Lifeworks is a registered investment advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor, tax professional, and/or attorney before implementing any strategy discussed herein. Past performance is not indicative of future performance.