The financial side of caring for aging parents

Americans will spend about $300 billion this year providing unpaid care for aging family members. If you're not currently in this position, you likely will be within 15 years. The financial and emotional toll is enormous, and the difference between a prepared family and an unprepared one is measured in tens of thousands of dollars and years of stress.

Start the conversation early

The best time to have the aging-parents money talk is when everyone is healthy and nothing is urgent. Ask gently but directly about: where their important documents are stored, what they'd want if they couldn't make medical decisions themselves, whether they have long-term care insurance, what their retirement income looks like, and who they want making financial decisions if they can't. Nobody wants this conversation. Everyone regrets not having it.

Documents to locate (or create)

• Will and/or trust.
• Durable Power of Attorney for finances.
• Healthcare Power of Attorney / Advance Directive.
• HIPAA authorization (so you can speak to medical providers).
• List of all financial accounts, institutions, and usernames.
• Insurance policies (health, life, long-term care, home, auto).
• Social Security information and pension statements.
• Funeral and burial preferences.

If you become the caregiver

• Track your own costs — many states have tax credits for family caregivers, and some employers offer caregiver benefits.
• Look into the Family and Medical Leave Act (FMLA) for protected unpaid leave if you need to reduce work hours.
• Consider whether your parent qualifies for veterans' benefits (Aid and Attendance is a common one).
• Don't sacrifice your own retirement to fund their care. Your future self can't borrow for retirement, but you can help your parent in other ways.