You’ve just packed your youngest child off to university and, if everything is going according to plan, you should be looking forward to some well-deserved “me time”. But your dad had a stroke last year and you mother’s failing health makes it difficult for her to care for him without help. So, instead of having the freedom to come and go as you please, you’re tied down again.
Sound familiar? Chances are you or someone you know could tell a similar story. With people living longer and starting families later, we’re seeing a new social phenomenon—adults with children at home and caring for parents at the same time. It’s been called the “sandwich” generation and it puts the squeeze—both financially and emotionally—on the adults caught in the middle. According to the 2012 General Social Survey by Statistics Canada, nearly 44% of those age 45 to 64 are providing care for a senior.
Elder care is becoming one of the foremost concerns of mid-career working people, as well as the newly and nearly retired.
Nothing can derail your retirement plans faster than having to care for an aging family member. The average age of a caregiver in Canada is 45—an age normally associated with prime income earning years. More than 80% of these individuals work. Many have had to change their hours at work, come early or leave later or take time off to cover their care responsibilities.
Extensive travel, moving to another community or spending the winters in warmer weather may not be possible if you find yourself having to look after an elderly relative. What if your parents don’t have the financial resources to cover the care they require? The additional expenses may be something you hadn’t considered. More than 40% of caregivers report incurring out-of-pocket expenses associated with providing care.
Few people plan for the effect of caring for elderly relatives when they are putting together their retirement plans, simply because most of us don’t want to acknowledge that our parents, who we once depended upon, may need to depend on us some day. However, not talking about the issue and not planning for it won’t make it go away; parents will age and it won’t always be as graceful or free from illness as we would hope.
To be able to effectively look after your parents’ interests, you’ll need to have the appropriate powers of attorney in place. A power of attorney for personal finances (known as a "mandate" in Quebec) will allow you to handle your parents’ banking, pay bills, manage their investments and dispose of their property. A power of attorney for personal care or advance directive for health care will outline the degree of personal care your parents desire and the measures that they want taken to sustain their lives. A copy of this document should be on file with your parents’ health care providers. In addition, while your parents have the presence of mind to do so, wills should be updated and any special bequests clearly outlined.
If you’re likely to be looking after parents or other elderly relatives, ensure you speak with your financial planner. Ask him or her to assist you with getting the proper documentation in place and assess the implications of caregiving on your finances and future financial plans.