More than 20 million Americans a year are taking on a new job they didn’t apply for: taking care of an elderly friend or relative.
Though more than half of the nation’s adults are doing this work or know someone who is, many aren’t prepared for the challenges, and most aren’t planning for the day they will need that care.
That’s according to three reports out in November in time for both Thanksgiving and Long-Term Care Awareness Month.
The “caregiving crunch”
With baby boomers aging in numbers not seen in generations before, we have hit an unprecedented caregiving crunch, says a study from Merrill Lynch that dubs caregivers “America’s other social security.”
The surveys from Merrill Lynch, Lincoln Financial Group and EMD Serono, an international bio-pharmaceutical business, reveal what people will do to care for others and the toll that effort can take financially, physically and mentally.
It’s a conversation few people in the graying trenches apparently want to have — particularly when they’re talking money.
Seventy-five percent of the people who are already doing the work say they haven’t talked about the financial repercussions with the person they’re caring for.
Most Americans head into retirement thinking they’ve got their own care covered, but they don’t.
“Often times, people plan to pay for long-term care costs out of pocket, but depending on the level of care needed, that may not be realistic,” says Mike Hamilton, VP of MoneyGuard product management at Lincoln Financial Group.
Long-term care expenses can range on average from nearly $48,000 for a full-time health aide to about $103,000 for a private room in a nursing home — and the numbers can vary greatly from state to state.
Healthcare expenses typically exceed what retirees think they’ll be, with 60 percent of those living in retirement saying it consumes most of their budget. That’s more than housing or groceries, according to one recent survey.
When a relative or close friend takes over the care, the costs shift.
Ninety-two percent of caregivers don’t simply tend to the person, they tend to the finances and those expenditures total $190 billion nationally, according to Merrill Lynch.
After two years of being cared for, 88 percent no longer manage their money on their own.
The three surveys investigated what family and friends were willing to do to care for their elderly loved ones, the price they paid for their efforts and the rewards. Yes there were rewards.
According to Lincoln Financial Group’s survey of more than 1,000 adults:
- 80 percent would help with cooking and feeding.
- 75 percent were willing to clean the house and help with personal needs.
- 47 percent would move a friend or relative into their home.
- 35 percent would cut their work hours or quit their job to provide care.
- 35 percent would pay to place someone into a facility.
Merrill Lynch questioned more than 2,000 caregivers and found:
- 75 percent say they’ve made family or professional sacrifices.
- 53 percent took a financial hit: 30 percent had to cut back on their own spending, and 21 percent dipped into personal savings.
- Two in five made sacrifices at work: 17 percent cut their hours, and 16 percent quit their job.
Nearly half of the people caring for someone else’s health said the work does a number on their own health, according to the third survey that polled more than 3,500 caregivers across seven countries including the U.S. Forty-five percent said they don’t have time to go to the doctors themselves.
Who are the caregivers?
They are three times more likely to be a spouse than the child of the person in need. They are more likely to be a woman, and researchers suspect this is due in part to culture and in part to women’s longevity. And women to more of it, averaging six years of caregiving in their lifetime versus four years for men. Women get the short end of this equation again when they grow old. They are more likely to find themselves without someone to take care of them.
The job doesn’t end with death, either. Financial and legal aspects of that caregiving can drag out for months or even years.
“Greater longevity is going to have a profound impact on the caregiving landscape and calls for earlier, more comprehensive planning and innovative solutions to address the health and long-term care needs of our loved ones,” says Lorna Sabbia, head of retirement for Bank of America Merrill Lynch.
That planning should include a talk with your family and a financial adviser. Research the cost of long-term care in your area. Know what is covered by Medicare, Medicaid and health insurance.
More than 90 percent said they are grateful they could be there for the person they’re caring for, and 77 percent “would gladly do so again,” Merrill Lynch reported.
Four in 10 said they had a stronger bond with the person they were taking care of and a quarter said their family came together through caregiving.
But the biggest bonus may be that 86 percent said they now are more intent on taking care of their own health after watching someone else’s health fail.
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