The Cost of Caregiving
Amy Goyer was working full-time in Virginia when the health of her aging parents started to take a downward turn. Goyer eventually quit her job and moved to Arizona to care for her parents. Her mother had a stroke, and her father would later develop Alzheimer’s disease.
Goyer worked as a consultant in order to have more flexibility for caregiving. Her parents used their savings but it was not enough to pay for daily living expenses and medical costs. Goyer soon depleted her savings due to more out-of-pocket costs. Over time, Goyer found herself drowning in debt and eventually filed for bankruptcy.
Goyer, now AARP’s family and caregiving expert, wants families to know that caregiving is expensive and one person cannot do it all. Like millions of other families caregivers, “I did what I felt was the right thing by my family, and it led me to financial devastation,” Goyer, author of “Juggling Life, Work and Caregiving,” wrote in her AARP column.
An overwhelming majority of respondents to a survey by Fidelity Investments related to Goyer’s caregiving experience. In the Fidelity Investments American Caregivers study, 79 percent of respondents said that the decision to become a caregiver set them back on a number of fronts, including their social life, mental health, financial goals, and their careers.
Three-quarters of respondents said choosing to become a caregiver was something they wanted to do. In order to provide care for an adult, however, more than one-quarter of respondents said they left a job, took a leave of absence, or shifted to part-time work.
“With the US emerging from the grips of the pandemic, now may be the ideal time for caregivers, especially those juggling work and family demands, to hit the reset button and find ways to lower their stress levels and tend to their own mental well-being,” Stacey Watson, senior vice president of Life Event Planning at Fidelity Investments, said in a statement about the study.
The study data suggest that a “reset” is possible if caregivers ask for help from their employers and other family members, as well as “build a roadmap for success—one that includes a financial plan.”
Explore Workplace Benefits
Financial experts recommend that employees think twice before walking away from the variety of job-related benefits that they can potentially tap into, such as:
- Reduced work hours
- Family Medical Leave Act and other unpaid leave options
- Working from home or other types of flexible work arrangements
- Enhanced childcare reimbursement (such as a flexible spending account)
- Early or phased retirement programs
- Employee assistance, mental health, and counseling services
- Oddly enough, 64 percent of working caregivers said they did not even ask their employer if special benefits or flexible options were available. For the roughly one-third who did ask, most of them said their employer was willing to work to accommodate their needs.
Leaving the workforce not only can affect a caregiver’s career, but also job-related benefits, such as:
- 401(k) or workplace savings programs (with an employer match)
- Employer-sponsored health insurance and employer contributions to health savings accounts
- Employee stock purchase plans
Just one-third of 32 percent of survey respondents said they calculated the cost of leaving their job and fully understood the potential financial impact of caregiving, and very few took time to calculate costs at all. And, maybe because of this, 62 percent said they sometimes felt overwhelmed by the financial stress.
All Hands On Deck: Make Caregiving A “Family Affair”
It’s typical for only one family member to handle all of the caregiving responsibilities, and that person is usually a female. Unsurprisingly, Fidelity’s study found nearly 3 in 4 caregiving respondents were female, which validates that women disproportionately bear the burden of caregiving in the American family model.
Experienced caregivers recommend making caregiving a “family affair,” by making a caregiving plan that assigns each family member a specific role, including being a back-up for when the primary caregiver needs a break, as well as contributing financially to expenses.
What’s more, primary caregivers should not neglect their own self-care, but be able to relieve themselves of the stress and burden of daily caregiving. Only 18 percent of survey respondents said that they make self-care a regular priority.
“Although selflessness comes with the territory, the problem with neglecting one’s own needs can be disastrous, creating a sense of helplessness and burnout,” Watson said. “That’s why it’s important to take time to plan for as many contingencies as you possibly can—and don’t be afraid to ask for help when you need it.”
Explore Caregiving Options
For additional help, families may consider hiring personal caregivers and home health aides, personal care aide, to work in shifts during the week. Another option is live-in care, where a trained professional caregiver lives in an older adult’s home. This works especially well when an older adult has a chronic illness, Alzheimer’s disease or another form of dementia.
Families can also look for care funding sources that could help ease financial burdens, such as a reverse mortgage, a home equity line of credit, and community and government social programs.
Goyer recommends families maximize any benefits that their loved ones may be eligible for, such as pensions, long-term care insurance, or Social Security. Goyer said she was able to get Veterans Aid and Attendance benefits for her father, which along with his Social Security, pension, and long-term care insurance, helped to reduce monthly expenses.
Goyer, whose parents are now deceased, looks back and thinks to herself that she “should have been able to manage caregiving.” But looking in the past and saying, “I-should-have” is something caregivers, she said, should not do.
“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.”
According to Watson, unless a person is in the thick of providing care, others may not realize the impact of caregiving. This is one reason why it’s important for caregivers to have a support network and to make a financial plan.
While they do not regret caring for their loved ones, 59 percent of caregivers responding to Fidelity’s survey said they made an emotional, rather than a practical decision to provide caregiving. Also, 83 percent felt they had no other choice but to assume responsibilities.
“When a member of the family takes on caregiving responsibilities, others may not realize the true toll it takes,” Watson said. “Awareness and communication are critical elements to a successful support system that benefits both the cared-for and the caregiver.”
Source Links:
https://www.aarp.org/caregiving/financial-legal/info-2021/expenses-financial-strain.html
https://www.reuters.com/lifestyle/wealth/cost-caregiving-when-financial-emotional-stress-compound-2021-06-09/
https://www.fidelity.com/learning-center/personal-finance/retirement/hidden-costs-of-caregiving
https://www.businesswire.com/news/home/20210527005555/en/Fidelity%C2%AE-Study-More-Than-Three-Quarters-of-Caregivers-Report-Financial-Social-Mental-or-Professional-Setbacks
