Can I afford to take care of my parents?
March 31, 2025
It's instinctive to want to care for those who once took care of you. Yet as life spans lengthen, caring for our frail, older parents is something many of us may not have planned for.
Supporting parents and parents-in-law is the most common form of caregiving reported in Canada. With 91% of seniors wanting to age in the comfort of their own homes, their caregiving children are often left navigating how to safely uphold their parents’ independence while they themselves work full time and live their own lives; and it’s taking a major toll on their time, finances and mental health.
Only so many hours in a day
This time adds up. A recent study showed that family caregivers put in three hours of care for every hour provided by our medical system. For some, this support becomes so time-consuming that they are forced to take employment leaves or exit the workforce entirely. According to a National Institute on Ageing (NIA) report, this issue costs Canada approximately $1.3 billion in lost productivity every year.
“Caregivers are often at risk of burnout and compassion fatigue,” says Dr. James Aw, Chief Medical Officer, OMERS, where he provides medical expertise on health and wellness for pension members, employees, portfolio companies and investments in healthcare. “The ongoing daily demands and emotional investment of ‘giving’ can put strain on the caregiver’s mental and physical health.
Repeated demands of putting the needs of others before your own can lead to physical, emotional and spiritual exhaustion. This affects many professions that require a lot of empathy. Many are also stuck in the ‘sandwich’ generation of taking care of their children and parents.”
Expenses add up
This brings us to the next challenge in a long line that comes with being thrust from the role of child (or niece/nephew, grandchild, etc.) to caregiver. Data shows caregivers spend, on average, $6,000 a year on expenses. That’s hard to do without a steady income of your own.
Marshall Posner, whose job is to ensure the OMERS pension plans are properly funded for the long haul as OMERS Plan Actuary, says “Most people presented with these costs during their retirement are unprepared for them, even if they carefully planned that retirement. Savvy individuals nearing retirement may target a minimum ‘replacement ratio,’ a proportion of pre-retirement income they might expect to need after retirement to maintain a similar living standard. But future caregiving costs often can be forgotten in that estimate, to the detriment of the aspiring retiree.”
The financial impact doesn’t end with yearly expenses, particularly for women. According to Statistics Canada, women tend to be the ones providing the majority of caregiver hours, which can often occur during what should be peak earning periods of their careers.
Invisible lost income
And while there are various caregiver, medical expense and disability tax credits available from the Canadian government, they can’t possibly keep up with what caregivers are, well, giving up. The NIA also found that “income-related losses sustained by family caregivers ages 50 and older who leave the workforce to care for a parent are $303,880, on average, in lost income and benefits over a caregiver's lifetime.” If that parent transitions into a long-term care home, costs can be at least $2,000 per month. Those lucky enough to not have to use their own assets (e.g., because the parents already have sufficient savings or a home to sell) to fund this still experience the emotional, physical and time toll of being a key person responsible for such care, and it would be naïve to think this doesn’t bleed into their career path. It’s also important to note that not everyone can count on such financial assistance from their parents’ circumstances.
The importance of being prepared
Financial advisors and others may offer some great tips on how to handle this unique financial challenge, but the truth is that as much as possible, it helps to be prepared in advance for the potential implications that come with having a parent (or parents) in need of your help. This allows you to ask yourself the question of whether you can afford to pay for such caregiving before you feel such pressure. In other words, when you can think more clearly.
And while the conversations can be difficult, they’re still important to have.
“Prevention is all about planning, self-care and being proactive,” adds Dr. Aw. “It’s important to discuss healthcare needs with your loved ones before it’s too late. Having a plan and focusing on early interventions will give both you and them peace of mind.”
Additional Resources: If you’re a caregiver who might be feeling alone, Lanark Community Alliance (LCA) has created a Stories for Caregivers web series platform, spotlighting the unique challenges and inspiring solutions found in rural caregiving across Canada.
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