Figuring Out Caregiving Finances

Caring for a family member or close friend is one of the most important roles you will play. It may start with driving your loved one to get groceries or to the doctor. Later, you may take more time off from work, prepare meals, or handle bills. No matter where you are in the journey of family caregiving, having a good framework to help guide you and your loved one will make the process easier.
Nearly half of WashingtonĀ caregivers age 45+Ā said that being a caregiver has had a major impact on their financial situation. At the same time, AARP research shows that family caregiversĀ spend more than $7,200Ā per year caring for family members who are aging, ill, or living with disabilities.
While itās hard to put a price on caring, it does come with some real out-of-pocket costs. Here are some things to consider:
- Assess the situationāStart by assessing the caregiving needs of your family member. Understand their medical condition, the level of care required, and whether theyāll need in-home care, assisted living, or nursing home care. This assessment will help you estimate the associated costs.
- Review insurance coverageāReview the insurance policies of the person being cared for. Health insurance, long-term care insurance, or disability insurance might cover certain aspects of caregiving expenses, such as medical supplies, home healthcare services, or assisted living costs. One thing that family caregivers often find surprising is that most health insurance, including Medicare, pays for little, if any, of the costs of care in a nursing home, assisted living residence, or help with daily activities such as bathing, dressing, or meals.
- Locate community resourcesāVarious support services are available to people aged 60 and over and their caregivers.Ā Community Living ConnectionsĀ can typically help connect older people, adults with disabilities, caregivers, and family members to home-delivered meals, transportation, adult day services centers, care management, and more. Younger people needing resources for themselves can visitĀ org/Ā or dial 2-1-1 from anywhere in Washington state to reach a referral specialist who will assess your needs and provide a list of referrals to available resources in your community. Washington 211 has a database of over 27,000 resources to help you find the right services.
- Government programsāWashington Stateās Paid Family and Medical Leave is a new benefit for workers and lets you take up to 12 weeks of paid time off when you need it most. Itās there for you when a serious health condition prevents you from working or when you need time to care for a family member. VisitĀ wa.govĀ for more info.
- WA CaresāThis year, a new resource begins for Washington workers. With deductions starting July 1, the WA Cares Fund will deduct 58 cents of every $100 of a workerās earnings. Beginning in July 2026, people who need help with personal care, medical assistance, transportation, meals, and more, can tap into the benefit. More importantly, it can be used to pay family caregivers.Ā WA CaresĀ provides flexible benefits so families can choose the care setting and services that best meet their needs.
- Estate planningāPre-planning is critical to preparing for future caregiving needs. Even if your loved one is as healthy as a horse, incorporating caregiving-supportive tools into their longevity plan is a good idea. Save or earmark certain assets specifically for caregiving needs. Run the numbers through retirement and benefits calculators and work with advisers to guide you on the options available.
- Caregiver FinancesāCaregiving can be a long-term commitment. Your retirement accounts are protected assets; taking money from them early or unnecessarily can come with tax consequences, penalties, and a reduction of your future well-being. Consider the potential impact on your retirement savings and financial goals. Think twice before tapping your retirement accounts to cover expenses.
Remember, every caregiving situation is unique, so itās essential to tailor your financial preparations to your specific circumstances. AARP Washington is here to support caregiversāand the older loved ones who count on them.
Contributor Christina Clem is a communications analyst at AARP Washington.Ā For more information, tools, and resources for individuals caring for a loved one, visitĀ www.aarp.org/caregiverswa.
This article originally appeared in the July 2023 issue of AgeWise King County.