As I continue to process what it means to be a caregiver and meet countless others who share similar experiences, I can’t help but see a badge of honor adorned on their chest. No, it is not a medal bestowed to us by other mortals, but a badge bestowed from a higher power. You will actually never see this badge, as it is tucked securely behind flesh, blood and bones; the heart.
Caregivers have a heart others wish they could obtain. An unbounded heart, spilling an endless flow of love toward the ones they care for. The terrors of caregiving are difficult for most to face, a reason why we, as caregivers, can feel shunned from the rest of the world. But we don’t turn away. We walk right into the terror with no idea why and no idea how to fix it but knowing we are called to do it.
When I meet another caregiver, a sense of solidarity overcomes me, like I have found a lost comrade in a war we cannot win. I feel connected. We share our metaphorical scars as a way to connect on this event in our lives. I can’t get enough of hearing the stories of others and sharing in the common experience we all must face.
I wish there was a way for us to identify ourselves to the world, to remove our hearts from our chests and wear them outside ourselves so that others can see what we are. As I see people in my daily life, I wish I could see this badge, flag them down, share our battle scars and embrace in a warm hug. Don’t be afraid to share your struggle because there are brothers and sisters who share in this experience and they are here to help. We are not alone in this fight, and though we may not win, we will not be defeated.
Chronic illness is expensive; we all know that. Doctors, medications, skilled nursing, home enhancements, all of this has a cost. Sometimes it may seem easier, and the only option for you, the working caregiver, to just pay it out of pocket. My advice is that you should refrain from doing this as much as possible. The best way I can describe my reasoning is by likening it to the warning they give on airplanes; put your oxygen mask on first before attempting to help others. If you are incapacitated, you can’t help anybody.
The same principle applies to your finances. If your finances suffer, this maybe not only a hindrance to your future but to your ability to care for your loved one. Below is a list of a few things you will want to try to avoid if needed to dip into your own pocket:
- Your retirement plans: This can have costly implications on the long term growth of that account and can really put your own retirement in peril. Typically, loans are tax free, however, if they are not paid within 5 years, it will be counted as taxable income. Also, some retirement plans do not allow loans, so if you take it as a withdrawal, it will count as taxable income as well as an additional 10% penalty and you will never be able to put that money back into the account.
- Adding your parent as a dependent on your health insurance: I have heard of some success stories with this, however, I would not count on this. It may not even be necessary with the new healthcare exchanges and, if your parent is over the age of 65, they are eligible for Medicare.
- Claiming your parent as a dependent for taxes: Claiming your parent on your taxes is allowable if you are provide at least one-half of their support. However, your parents income level has to be below the personal exemption amount (for 2016 is $4,050). If they are receiving any Social Security, this maybe a hard number to hit, so any tax benefits will be hard to come by.
- Health Savings Accounts (HSA) and Flexible Savings Accounts (FSA): Both of these accounts are tax savings vehicles to help pay for medical expenses. Money from these accounts needs to be used for qualified medical expenses for the individual and their family. If they are used on a non-qualified expense or for a benefit not covered on the plan, they will be subject to income tax as well as an additional 20% penalty tax.
Being a family caregiver for someone living with chronic is a difficult task and using some of your assets to help with care may be inevitable. The saving grace is the political discourse seems to now be addressing this issue for family caregivers. There are a few bills presented to Congress to give some financial assistance to caregivers. Even President-Elect Trump has outlined tax incentives to assist the family caregiver. That being said, the gears of democracy grind slowly and until those bills or promises become law, you should try your best to protect your finances so you can survive the difficult task of caregiving for someone with chronic illness.
I remember when I was first tasked with figuring how the finances would work for our family to assist with caregiving. Social Security, Medicare, Long Term Care; the reality was daunting. I didn’t even have enough work history or income to qualify for these benefits and I needed figure out how they work for my family.
If you are a working professional who is tasked with the responsibility of assisting an elderly parent who has been diagnosed with a chronic illness, you maybe having similar thoughts as I was in regards to their finances. If this is the case, having a plan is going to be your saving grace to make sure they receive the best care possible, without interruption due to finances.
First, you need access to your loved one’s information. Power of Attorney is critical in managing day-to-day finances for someone who a chronic illness, however, having the document is not the only step. Make sure banks, financial advisors, CPA’s and anybody dealing with privileged information receives a copy of it and approves you to act on your parent’s behalf.
Now that you have access to their information, you may have to make decisions about what assets to use to pay for their care. Below is a summary of some common assets you may use or need to know about:
- Social Security: Senior citizens are eligible for payments from the Social Security starting at full retirement age (typically age 67). The payments are based on their lifetime earnings and are paid out monthly. If someone is disabled prior to full retirement age, they may be eligible for Social Security payments as well.
- Medicare: Basically, there are three parts: Part A: hospital insurance, Part B: doctor visits and Part D: prescriptions. Medicare is available to individuals once they reach the age of 65. One thing to keep in mind with Medicare is that there is no long-term care insurance. They are eligible for Skilled Nursing Facility Care only after a hospital stay and only up to 100 days.
- Medicaid: This is a program designed for needy and vulnerable individuals and families. It is a federal program, however, each state is in charge of administering the Medicaid dollars and determining need. What is nice about Medicaid is that it does offer Skilled Nursing Facility Care. However, since this is designed for low income population, it is very hard to qualify. Families sometimes try to “spend down” a loved one’s assets to qualify them for Medicaid, however, states now have a five year look back period to see if large amount of assets were given away instead of being used for care. Consulting an attorney is the best way to implement a strategy to qualify a parent.
- Retirement Plans: Your parent may have saved money in a retirement plan during their working years or may have a pension from an old employer. It is important to use this as additional income if Social Security is not going to be enough. Some accounts you may typically see are 401(k)s, 403(b)s, Pensions, IRAs and Roth IRAs. All distributions from these accounts are considered to be taxable income (except the Roth IRA), so tax planning may be involved.
- Reverse Mortgage: Typically thought as a last resort, using a reverse mortgage on your parent’s home may be a great way to get some supplement income to cover the cost for care. If your family has decided not to keep the home after death and if there is little to no mortgage, this is a great way to create income off an asset that is illiquid. Reverse mortgages are only available to those 62 years and older and may only take up to a certain amount on the value of the home. If you are considering this option, discuss it with a financial planner as well as a reverse mortgage broker.
In my experience, the more prepared you are, the less likely for caregiving to become a nightmare. Make sure you create a plan and periodically check in to make sure you are on track. Don’t be afraid to ask for professional help as well. There are many professionals with expertise in these areas that can help ease the stress of trying to figure it out on your own.
When you are a caregiver, you are the guide for your loved one as they cross the bridge toward death. The world, with colors and noise swirling around, keeps tugging and pulling on you, wanting you to come back, but the labored last few breathes of your loved one can’t let you go. You’re mesmerized. They are going to die and there is nothing you can do but help them across the bridge and try to get back to your side safely.
In spiritual folklore, some animals can cross between this world and the next. I am particularly fascinated by the folklore of the wolf. Wolves hunt in packs, dependent on one another to survive. But, when necessary, the lone wolf can travel without the others, their howls stretching high upon the heavens, to connect with the dead. Caregivers are like wolves. Fiercely pack oriented, they need a team to help but they are the only ones who can help their loved ones cross the bridge.
I remember my mother’s last few days, our downstairs den turned into the staging area for her crossing. I had a certification test coming up soon; nine months of work concluding with a grueling exam to determine if I was to be branded with initials at the tail of my name. But my mom was calling me to the bridge. The night before my test I went to see her; my inner lone wolf was howling. I had a sense that, during my eight hour exam, she would be gone, because we were counting hours, not days. When I got there, she already looked dead. Each labored breath seemed to be her last. Her skin was pale, her hands cold, her eyes glassy, her jaw was lax and skin tight, she looked closer to a skeleton than a woman. When I clasped her cold, clammy hand, she weakly gripped back. It was the softest grip my fleshy hands have ever felt but I was not able to break free. I just held her hand and tried to have her mimic my breathe. I wasn’t satisfied but I had to head back to my side of the bridge. If I didn’t, my side would be in shambles.
I passed my test and a few days later my mother died. I didn’t see her last breath. I didn’t need to. My side of the bridge kept calling and it repulsed me into anger; anger for the insensitivity of the pragmatic world, anger that my sweet mother was taken from me, anger and shame that I couldn’t watch her last breath. When I came back to my side of the bridge, I was different, I had changed. I wasn’t whole. The world, with all it’s color and noise, seemed different to me. I genuinely feel this side of the bridge has it wrong, our judgements, prejudices, and hate; that doesn’t exist on the other side. As you prepare to guide someone to the other side, all that matters is that you are able to pack enough love for their journey so they can streak across the heavens. Don’t forget to save some love for yourself though; you’re going to need it for the journey back across the bridge.
Shane P. Larson, CFP® has been a caregiver most of his adult life. With one semester left in college, his family received the devastating diagnosis of early-onset Alzheimer’s for their beloved mother.
Starting his career while also being pulled back home to help care for his mother shaped Shane’s perspective of the world. Taking the skills he learned as wells as the family lessons gained from caregiving, Shane started his own financial planning practice to assist other families who are facing similar situations and help guide them through the difficult task of caregiving.
Currently residing in Seattle, WA, Shane enjoys writing, reading dense books, riding his bike, obsessing over baseball, enjoying a slice of pizza and a pint of craft beer, and taking impromptu trips with his wife.