As routine tasks become daily challenges, it’s natural for our aging loved ones to need a helping hand – a ride to the grocery store, a reminder to take medication, extra support throughout the day. At some point, you may find you’re unable to give your mom, dad or senior relative the attention they truly need.

And deciding what to do next is never easy. Hire a caregiver? Move to an assisted living facility? Something in between? 

Determining the best way care to for a loved one who’s entering the final stage of his or her life is naturally one of the most difficult yet important decisions you’ll ever make. In addition to the enormous personal implications, there’s a major financial component to consider as well.

By planning for the future together and weighing all of your options, you can be sure your parents, relatives and loved ones get the care and support they need while keeping their finances – and yours – in order. 

Seniors retiring early, living longer

Thanks to advances in medicine and improving environmental factors, seniors are living much longer than they were even a few decades ago. In fact, today, the average life expectancy in the U.S. is nearly 80 years. That means more time to spend with family, take up new hobbies and make the most of the golden years. 

But it comes with a caveat. Given that the average retirement age is just 63 years old, according to the U.S. Census Bureau, many seniors are less prepared than they could be financially for the final stage of life. This makes it even more important for you and your loved ones to think strategically about financing long-term senior care. 

Bringing in a part-time or full-time caregiver

A simple way to help manage the day-to-day responsibilities of your loved one is to hire a senior caregiver. They can fill in on an ad-hoc basis when you or other family members are unable to be around, or function in an around-the-clock capacity if the need is there. 

Caregivers assist in a variety of ways, including helping with basic personal care (i.e., bathing, grooming, exercise), meal preparation and household chores. They can also be an emotional and recreational support for parents or loved ones who live on their own.

Though average rates vary by region, expect to pay about $20–30 per hour for caregiver or home assistant services. This equates to roughly $3,500 each month for full-time nine-to-five care. 

Alternatively, you may want to explore senior community and adult daycare programs. Not only are these options budget-friendly, but they offer an important social outlet and can help your loved one maintain a structured yet independent lifestyle. 

Daycare programs typically run about $45–60 per day, depending on location, which makes for a monthly expense of roughly $1,200. Even when combined with part-time caregiver services, you and your loved one may find that it’s still an affordable option. 

Making the shift to an assisted living facility 

If your senior parent or relative truly needs 24/7 attention or is unsafe on their own, having a caregiver may not be enough. At this point, it’s smart to consider assisted living options. Different than nursing homes, which focuses on full-time medical care, assisted living communities blend an independent lifestyle with the comfort of on-demand support. 

In an assisted living facility, residents get the help they need for difficult daily tasks, such as bathing and cooking, but live with other seniors and still exercise a fair deal of freedom. 

On average, these communities cost approximately $3,500 per month ($43,200 annually); however, they can range quite a bit in amenities and services. As with other elder care options, it’s smart to research your local facilities for a true sense of future expenses. 

Balancing personal finances with family needs

While social security benefits and retirement savings can help defray the cost of senior care, depending on your loved one’s personal financial situation, that may not be enough to give them the care they need. 

Assuming you make the decision to jump in and help financially, do your best to protect your own long-term retirement plans along the way. For example, it’s not recommended to dip into your 401(k) account to make ends meet.  

Moreover, if you choose to take a leave from your job or quit outright to help care for a loved one in need, realize that what you gain in avoiding senior care expenses you might lose in compensation, career growth and future marketability. Before making a firm decision, explore all of your senior care options and weigh their expected cost against your own earning potential. You may find that it’s more practical to pay for a short-term caregiver than to take a major detour in your career.  

Lastly, while there are a handful of tax benefits for financing elder care expenses, a common misconception is that Medicare covers caregiver services or assisted living facility costs – it doesn’t. Rather, the insurance program covers a variety of standard medical expenses and essential nursing care, which is actually different than assisted living.

Moreover, both you and your loved one may be eligible to deduct several common medical expenses, including health insurance premiums and transportation to doctor appointments. You can also claim your parent or relative as a dependent if you cover more than 50% of their total living costs. 

At the end of the day, there’s no easy way to cope with the heavy changes life brings. But by making a plan and outlining anticipated senior expenses ahead of time, you can be sure you’re making the best of a tough situation.