Figuring Out Caregiving Finances

Caring for a family member or close friend is one of the most important roles you’ll 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 Washington caregivers age 45+ said that being a caregiver has had a major impact on their financial situation. At the same time, AARP research shows that family caregivers spend more than $7,200 per year caring for family members who are aging, ill, or living with disabilities. While it’s 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 situation: Start by assessing the caregiving needs of your family member. Understand their medical condition, the level of care required, and whether they'll need in-home care, assisted living, or nursing home care. This assessment will help you estimate the associated costs.

• Review insurance coverage: Review 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 resources. Various support services are available to people aged 60 and over and their caregivers. Washington’s Area Agency on Aging, www.agingwashington.org/,  can typically help connect you to home-delivered meals, transportation, adult day services centers, care management, and more. You can also visit https://wa211.org/ 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 Programs: Washington’s 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. It’s here for you when a serious health condition prevents you from working or when you need time to care for a family member. Visit paidleave.wa.gov for more info.  This 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 worker’s 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. WA Cares (www.wacaresfund.wa.gov) provides flexible benefits so families can choose the care setting and services that best meet their needs.

• Estate Planning: Pre-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 Finances: Caregiving 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 it's essential to tailor your financial preparations to your specific circumstances. AARP Washington is here to support caregivers – and the older loved ones who count on them. Visit our caregiving website for information, tools, and resources for caring for a loved one at www.aarp.org/caregiverswa.