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  • Working Together in Caregiving: The importance involving the entire family

    The truth is that for the most part a single person is “the” caregiver. This role can take a serious financial toll. As we mentioned in a previous blog for this month, caregivers often rearrange work schedules to meet caregiving duties and take on extra expenses related to caring for someone else. It is important, therefore, to talk to your siblings and other family members about the various costs accruing and how they can help you alleviate some of the financial burdens. It can be a hard conversation to have, but it is oftentimes acceptable to ask family for compensation for your hard work.

    Consider asking your family to pay you as an independent contractor for the care you are providing. Compensation from other family members will not only help you cover the day-to-day costs, but also help you to stay on track with your own retirement savings. If you are paid, you can set up a small-employer type of pension plan, such as a Simplified Employee Pension (SEP) and continue to save for retirement even if you had to cut your hours at work or had to leave your job completely. You can read more about SEPs on the Department of Labor’s website.

    To ensure the best financial future for yourself as the caregiver of a family member, WISER suggests creating a contract between you and the rest of your family. Yes, this step can seem a little formal and maybe hard to bring up, but we believe it is one of the best routes to take to avoid unduly taking on financial responsibilities. These “personal care agreements” are official contracts that state what care will be provided and how much the caregiver will be compensated. These agreements make the care and payment clear for the caregiver, the recipient, and also for other family members. Having a formal contract and discussion with family can help avoid conflicts in the future. Make sure you bring your budgeting information and the worksheet you did earlier to the meeting with your family so they can better understand the costs involved.

    What should be included in these agreements? They should be about services in the future and payment for those services, not for services already performed. When deciding on compensation, look into what is typically charged for the services in your geographic area. Payments must be reasonable and similar to this standard amount.

    Make these contracts as detailed as possible to avoid any confusion later. Include the following:

    1. Date care begins
    2. Detailed description of services
    3. How often services will be provided (and allow for flexibility with language such as “no less than 20 hours a week” or “up to 80 hours a month”)
    4. How much and when the caregiver will be compensated (i.e. weekly, monthly)
    5. How long the agreement is in effect for
    6. Location where services will be provided
    7. A statement that the terms of the agreement can be modified by mutual agreement (in writing) of the parties involved
    8. Signatures by the parties and date agreement was signed


    Want to know more about the costs of caregiving and how you can involve your family in the financial planning? Read our booklet for caregivers.

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    About Us

    WISER is a nonprofit organization that works to help women, educators and policymakers understand the important issues surrounding women's retirement income. WISER creates a variety of consumer publications including fact sheets, booklets and a quarterly newsletter that explain in easy-to-understand language the complex issues surrounding Social Security, divorce, pay equity, pensions, savings and investments, banking, home-ownership, long-term care and disability insurance.

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