As America ages, more and more financial planning clients will be touched by the emotional and financial strains of caregiving.
Almost half of family caregivers spend more than $5,000 per year on caregiving expenses, according to a new Caring.com report. A family caregiver is defined as someone who takes care of a family member or friend, but is unpaid for their services. Their caregiving expenses include out-of-pocket costs for medications, medical bills, in-home care, nursing homes and more.
“Caregiving can be a startlingly expensive endeavor that most people aren't financial prepared for,” said Caring.com chief executive officer Andy Cohen.
Caregiving not only has an effect on finances, but it can also impact current employment and future retirement plans, too.
“Family caregivers, especially baby boomers, run the risk of derailing their retirement plans if they don't prepare for the costs associated with caregiving,” Mr. Cohen said. “Almost half of caregivers spend $25,000 on caregiving in just five years — that's a significant chunk of money that could delay retirement by a couple of years.”
One-third of family caregivers reported spending more than 30 hours per week on caregiving, making it almost the equivalent of a full-time job. Half of respondents to the online survey said they changed their work schedules to accommodate caregiving, while 30% said the often arrive late to work or leave early and 17% said they missed a significant amount of work.
“Family caregiving affects more than 50 million Americans,” said David Leyy, a gerontologist and eldercare expert. “You are, were or will be one of them.”
Mr. Levy, along with his business partner Paul Vattiato, both family caregivers, discuss the latest news about family caregiving and answer questions about hands-on care on their
internet radio program. They are working on a training seminar and resources for financial advisers, including a caregiver audit checklist that advisers can use with clients.
“This is going to become the defining part of what financial planning will become,” said Mr. Vattiato, who spent 29 years in the wealth management business before retiring early to care for his wife who developed lupus, a degenerative autoimmune disease.
“I think that most of us who were born and bred in the world of financial planning were more geared to the numbers and everything going down a straight path,” Mr. Vattiato told me. “But understanding the impact of what this is going to do in terms of income and assets was never fully explored.”
Caring.com's annual online survey of family caregivers was conducted this summer and was based on the results of more than 1,300 family caregivers.
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