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How To Handle The High Cost of Caregiving

Rebecca Cohen  |  March 2, 2021

It’s time to get your finances in order, and a plan in place in case of a medical emergency that requires you to care for a loved one.

Amy Goyer has no regrets about the choices she made in becoming a family caregiver — a decade-long journey that involved a move across the country to care for her mother (who had a stoke), her father (Alzheimers), her older sister Karen and even her father’s service dog.  

Goyer quit her job in exchange for a more flexible career so she could be available to take care of her family, something she was doing almost 24/7. She lost benefits, health insurance, 401(k) and pension contributions. She stopped saving.  And eventually, she filed bankruptcy.  

As a caregiving expert, Goyer noted at an AARP Forum on the Cost of Caregiving held virtually last week, that she knew the right steps to take.  There had been long term care insurance in the picture (her father had purchased it after her grandmother was diagnosed with Alzheimers).  But even her financial stability wasn’t immune to the high cost caregiving can take.  

She also noted that she wasn’t the first person this happened to — nor will she be the last.  

LISTEN: HerMoney Podcast: Leaving Work To Care For Loved Ones — What You Need To Know

There are 48 million caregivers in the United States, most of them women, who are spending upwards of $7,000 per year in expenses and 24 hours per week to help their loved ones. The vast majority are not being paid for their work. 

According to the report Caregiving In the US 2020 (from AARP and the National Alliance for Caregiving) one out of every 5 caregivers reports having financial strain related to their caregiving responsibilities, and 4 out of 10 caregivers have run into a financial crisis during their time as a caregiver. The pandemic — which has boosted the need for at-home caregiving — has only exacerbated these trends, particularly for the women who are leaving the workforce at a rate of 4:1 to men. 

If you find yourself in this situation, Goyer and others noted, it’s important to lay out a plan to follow.  Here are some suggestions to get you going.


First, take a look at your own budget. What’s coming in? What’s going out? Where is it going? And how has this changed? This can help give you a better idea of the money you have at your disposal to deal with the crisis at hand.  Then, do the same with the budget of your loved one.  

Next, focus on the paper trail. Talk to your aging parents and get the answers to all of the questions about a) their wishes and b) the steps you need to follow you’d need in case of an emergency.  This helpful, downloadable (and, yes, free) Financial Workbook for Family Caregivers can help you keep it all in one place. Among the important pieces of info to have: 

  • What are your medical directives? 
  • Do you have a power of attorney? If so, who is it? 
  • Where are all of your accounts held, what are their passwords, and who has access to them? 

Be sure to include your siblings in the conversation for two reasons. The first, to make sure they are on board with your parents’ care choices and to confirm what they can contribute both financially and time-wise. The second, ask them all of the same questions you asked your parents. Tell them your answers to those questions to ensure there is someone in the family who has all of the necessary information. 


Plenty of caregivers — 10% — quit their jobs when someone in the family needs long term care. But thanks to the pandemic, long term care flexibility has become available at more companies. From flexible hours to work sharing, it has never been more possible to keep your job while caring for someone in need. The hope is that these policies continue in a post-pandemic world. 

But whether they do or don’t, you have to deeply consider whether giving up your job is absolutely necessary, and only you can make that choice, says Jean Chatzky, HerMoney CEO and AARP Financial Ambassador. Be sure to consider what you’re losing when you leave a job — it’s not just salary. It’s the benefits, the possible pension or 401(k) contributions, the Social Security credits and the career development you’d be missing out on. 


Once you have made the choice as to how you are going to be a caregiver in this singular situation, it is important to keep the lines of communication open with your entire family to understand what role everyone plays in this event, and what the requirements are of each role. Will you have to move? Will you have to front some money? Will you have to accompany your parents to multiple doctors appointments or arrange for doctors to come to their home? Will you have to buy medical supplies to help with care? The questions and details can be — as Goyer noted — both endless, and endlessly stressful.  

In addition to assigning roles, you have to keep a dialogue with the person being cared for as to what their wishes are in this long term care situation — and at what point you can go against their wishes because it will benefit them (and you!) in the long run. For example, far more people prefer to age in place, but 98% of homes are not equipped to handle an aging person. Depending on the situation, you may have to make the choice to move them into assisted living. 

You should also be aware of the finances and whether you can find another stream of income to help pay for the care you are giving.  Consider whether your loved one can hire and pay you for the work that you provide. Most states have programs that allow friends and family members to be paid for some caregiving duties, and 15 states have expanded these programs during the coronavirus pandemic, according to AARP. The majority of these programs are offered through Medicaid or Veterans Affairs. You can reach out to a local Medicaid or VA office, or to your local Area Agency on Aging to find out if this is an option where you live.


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