How Years of Caregiving Led to Bankruptcy

Out-of-pocket costs and spiraling expenses took a huge financial toll

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Amy Goyer

En español

Published February 26, 2021

Caregiving for my loved ones has been the most important role of my life and one I will never regret. Over more than a decade, I cared for my wonderful family — both of my parents, Dad's service dog and my sister. While I fully chose to do this and it brought me much joy, it did not come without costs and sacrifices. In fact, like millions of other family caregivers, I did what I felt was the right thing by my family, and it led me to financial devastation.

Growing caregiving expenses

Mom had a stroke when she was just 63, and 20 years later, Dad developed Alzheimer's disease. My parents had done retirement and estate planning; they thought they were prepared. They had a solid $5,000-per-month income with Dad's pension and Social Security for both of them. But by the time I got involved in their finances, when they were in their early 80s, they had a considerable mortgage on their house and had depleted most of their savings and investments. When Dad stopped driving, they and Dad's service dog moved to a nearby continuing-care retirement community in independent living. Fees were approximately $4,000 a month and included meals, but personal-care services, such as help with bathing, medication reminders and an escort to dinner or activities, were extra. Their long-term care insurance helped, and I started picking up the expenses their budget wouldn't cover.

I quit my full-time job and became a consultant, in order to have flexibility while caregiving. But I lost benefits and had higher expenses. I moved from Virginia to their house in Arizona so I could manage their care and started covering their mortgage payments while still renting an office/lodging in Virginia, where I traveled to each month for work. My savings were depleted fairly quickly.

Rise in care needs

Three years later, both of my parents needed 24-hour care and moved back into the house with me. I sold their farm in another state to lower their expenses. I had to work during the day, and I also traveled frequently for my job, so I hired live-in caregivers, and I took care of my parents in the evenings and on weekends. I could no longer work from home with both parents, caregivers and therapists coming in and out, so I rented an office.

Devastatingly, Mom suddenly passed on a year later, at age 87. I had also had a caregiving role with my oldest sister, who passed on a year after my Mom, at age 62, compounding our deep grief. As executor of her estate, I wound up spending thousands of unreimbursed dollars.

Reduction in income

Dad's dementia took a sharp downturn. His needs increased, but my sisters and I were determined to lovingly care for him at home. Without Mom's long-term care insurance and Social Security, his care budget went down about $3,000 a month. Eventually, I got Veterans Aid and Attendance benefits for him, which helped replace about two-thirds of that. Still, even with $8,000 a month coming in through his pension, Social Security, LTC insurance and VA benefits, a big monthly shortfall arose.

In the last years of Dad's life, his medical expenses alone were over $10,000 a month, including more than $90,000 per year just for paid caregivers. I was also providing 60 to 80 hours of unpaid care each week unless I was out of town on business. I paid for almost everything else — the house, food, clothing, incontinence supplies, his service dog's costly medical care, and other things that enhanced Dad's life and made it easier to care for him. We took a home equity line of credit to consolidate some debt and remodel the bathroom to be safer for him.

Drowning in debt

Amy goyer with her mom and dad and their service dog

Amy Goyer with her parents, Robert and Patricia, and service dog Mr. Jackson in the summer of 2010.

Courtesy Amy Goyer

Financial Resources:

• AARP Caregiving Financial and Legal Resources

• AARP Long-term Care Calculator

• AARP Financial Workbook for Caregivers

• AARP Financial Workbook for Military and Veteran Caregivers

• Understanding Long-term Care Insurance

• Getting Caregiving Help from the VA

• Planning for Retirement? Don't Forget Caregiving Costs

My sisters and I all made personal and financial sacrifices, but, like many other primary caregivers, I carried the bulk of the financial burden. As needed, I had been using my credit cards for expenses that exceeded my income, which I stopped doing eventually, but the debt grew with interest. I was desperately trying to reduce it, but when rising monthly expenses necessitated paying the minimum balance on credit cards (which I knew was never a good idea, but I had no choice), the debt exploded rapidly. The interest rates and balances soared for cards that I hadn't even used in many years.

Dad passed on at home, surrounded with love, in 2018, at age 94. It was six years after he had moved in with me. Life after caregiving was harder on every level than I thought it would be.

Bankruptcy: the hard reality

I tried to manage my debt, but I was financially overwhelmed. Several lawyers and financial experts advised me that bankruptcy was the best course. For me, it's been a long, humiliating, demoralizing and stressful process. I can also tell you that now that it's over, there is a level of relief. I continue to pay taxes that I got behind on one year, as well as the mortgage and the home equity line of credit.

I realize that few people talk about their finances and that doing so makes me vulnerable. I own my choices to care for my family. I do not need, nor want, sympathy. I do, however, want people to understand the real costs of caregiving. An AARP study found that family caregivers spent an average of nearly $7,000 of their own money per year (in my experience, those costs were much higher). I want the 53 million family caregivers in the U.S., many of whom are struggling financially, to know that they are not alone. I have a great deal of experience with caregiving, and I did my best to give my family the best care and support. But while my situation may be extreme, the unimaginable can happen. The cost of caregiving can be too much for anyone.

For me, bankruptcy means that over the next seven to 10 years, I will have a low credit rating. I can't help with the expenses of the house my boyfriend is renovating for us to live in someday. If I need a new car, my interest rates will be quite high. And I have no savings left going forward. I have a lot of work to do to rebuild my financial security for the future.

Moving forward

Time brings perspective. Bankruptcy is a terrible loss, and I did all I could to avoid it. But there is no loss as great as that of losing those we love so well. And how can we put a price on caring for loved ones while preserving their dignity and quality of life?

Caregiving is expensive and all-encompassing; one person cannot do it all.

We shouldn't have to make a choice between financial devastation and providing quality care. People are living longer but with chronic health issues. My parents planned for their future but didn't predict their high long-term care costs.

I once read that an optimist is someone who takes two steps forward and one step back and figures out it's not a disaster — it's more like a cha-cha. So that's my goal. I'll keep moving forward, work hard and rebuild. Caregiving has taught me how to be resilient. While the enriching knowledge that I did well by my family won't fill my bank account, it does fill and comfort my heart. And that's worth millions to me.

Here are some of the things I've learned so far.

• Get help: I thought it was an expense I couldn't afford, but I wish I'd retained the services of a financial adviser early on.

• Maximize loved ones’ income and services: My parents’ long-term care insurance was a huge help, and services and support from Veterans Affairs were critical for Dad, although I wish I had accessed them much earlier.

•Keep working and protect your resources: I was fortunate to have flexible full-time consultant work, so I never stopped contributing to Social Security, which will help in my retirement. I'm also glad I never tapped into my 401(k) or pensions. If you are a working caregiver, ask about flexible work or paid-leave options.

• Don't “should” on yourself: I kept thinking, I should be able to manage this. But now I see that my situation was extreme: caring for multiple people, the adjustments I made in my life to do so, and the long-haul after a stroke and Alzheimer's. I truly did the best I could with the knowledge, resources and energy I had at the time. I have nothing to be ashamed of.

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