Most caregivers know without being told that caregiving is taxing physically and emotionally—and the facts bear them out. According to a study by the Commonwealth Fund, caregivers develop chronic conditions at nearly twice the rate of non-caregivers, and estimates show that between 40 percent and 70 percent of caregivers have clinically significant symptoms of depression. Their own poor health is the reason most frequently cited by caregivers for a decline in the quality of care they can provide their loved one. That's why it is so important for caregivers to schedule an appointment for an annual physical exam—and keep it.
The same holds true for your financial health. A MetLife Mature Market Institute study found that virtually all employed caregivers underestimate the time that caregiving requires—and that many report losses in wages with implications for their social security and retirement benefits later in life. In addition, many caregivers spend substantial sums each month on groceries, medicine, and transportation for their loved ones. In these circumstances, it makes sense to schedule an annual financial exam to go along with your physical.
You may conduct your financial exam by yourself or engage a professional to guide you through the process and provide objective advice. If you decide to use a financial planner, you might want to consider one who charges on a fee-only basis. Fee-only advisers receive no commissions of any kind so have no incentive to use products that are not in their clients' best interest or to recommend a product or service that their clients don't need.
Whether you conduct your examination yourself or with an advisor, here is an agenda you can follow:
- Examine your progress toward your personal financial goals. Are you still committed to these objectives? What can you reasonably expect to accomplish in the coming year?
- Review the events of the past year. Have any impacted your ability to achieve your goals? What would you do differently in the upcoming year?
- Check your insurance policies. Is your coverage still appropriate for your situation? Can you secure a better policy with another company?
- Read over your estate documents. Do they still reflect your wishes? Do they include a living will?
- Look at your investment performance. How have your holdings done compared to appropriate market indices? Are your assets still allocated correctly for your age and tolerance for risk?
- Review your retirement plans. Are the assumptions upon which you base your plans still realistic?
A good time to conduct your annual financial planning is before the end of the year. This gives you the opportunity to maximize the tax advantages of any decisions you make.