Co-authored by Maddy Dychtwald
“There are only four kinds of people in this world: those who have been caregivers; those who currently are caregivers; those who will be caregivers; and those who will need caregivers.”
–Rosalynn Carter, Former First Lady and Founder, Rosalynn Carter Institute for Caregiving
Caregiving is becoming America’s new normal. Already, 40 million Americans are providing 37 billion hours of care per year to someone they love—mostly to aging parents, grandparents, and their own spouses. Often, they are simultaneously caring for their own children, working full-time, and putting their own financial futures in jeopardy. The challenges of caregiving are positioned to rock the precarious work-life balance like never before, especially for women who are frequently providing the care. These issues will only intensify as the massive Boomer generation ages—and the caregiving crunch takes hold of our country, our economy, and our lives.
Family caregiving is about to become our nation’s biggest off-the-books industry. What’s really frustrating is, as caregiving becomes a reality for most Americans at some point in their lives, it feels like no one is telling us how to prepare for it—the steps we can take now to make life easier for our family if we wind up providing care, needing care, or both.
Our company, Age Wave, in partnership with Merrill Lynch, just released a new study, The Journey of Caregiving: Honor, Responsibility and Financial Complexity, which examines the emotional, functional, and financial rewards and sacrifices of caregiving. We conducted focus groups, interviewed numerous experts in the field, and surveyed a total of 2,382 respondents age 18+ in the U.S., including 2,010 caregivers. We delved deeply into all aspects of caregiving, including the uncharted world of financial caregiving, a role held by 92% of caregivers and rarely talked about.
We want to emphasize that caregiving will affect you, if it hasn’t already. Although we’re enjoying the greatest longevity in human history, our healthspans are not keeping pace with our lifespans. According to the U.S. Department of Health and Human Services, nearly 7 in 10 Americans turning 65 today will need care for prolonged periods in their lives, and 20% will need support and services for longer than five years.
We both understand this firsthand. Both of our mothers suffered from Alzheimer’s disease for years, requiring caregiving at home provided by our families. It was emotionally wrenching and impacted every aspect of our lives. In fact, it became the priority in our lives, with some painful sacrifices and some unexpected rewards. Understanding the scope of caregiving and planning for this eventuality can save you and your loved ones’ time, money, and, most importantly, heartache. Here are three important things to know:
1. There is a steep learning curve with big challenges.
Caregivers face a barrage of new needs to understand, skills to learn, routines to be coordinated, and complex systems to navigate, including health care and financial systems. Caregiving includes a variety of services from daily chores such as driving loved ones to doctors, shopping, laundry, and providing meals, to the more personal such as helping with dressing, toileting, and bathing. It also includes making choices about and handling daily responsibilities around health and finances, which can seem daunting.
Caregivers in our study say that the time and energy spent on caregiving is the hardest part (68%). Almost half (45%) report facing difficulties navigating the health care system. As one of our focus group participants told us, “I never in my wildest dreams expected to be a caregiver for my mom. I love her so much, I want to make sure she gets the love, care, and respect she deserves. But it’s put me on duty 24/7 which has taken a toll on me, my husband, and my kids.”
Figure 1: The Biggest Challenges of Caregiving
At the center of all this is the emotional complexity of forming a different kind of relationship with a loved one, which often involves a role reversal. Almost half (45%) of all caregivers struggle with this, while focusing on what they tell us are their top three goals of caregiving: to preserve the dignity of their loved one, provide the best care possible, and keep their loved one out of an institution. Many caregivers also believe part of their role is to make sure the recipient does not feel like a burden on them, even when they might be.
2. Along with the burden, there are unexpected blessings.
Caregivers are on a unique journey that can be emotionally, physically, and financially rewarding. For one thing, almost all caregivers (96%) agree that caregiving is much more than hands-on care. Two-thirds say they often feel overwhelmed with responsibilities, and 6 in 10 caregivers are experiencing significant ups and downs in their moods.
At the same time, however, caregivers report that the experience of caregiving is rewarding and often strengthens relationships and bonds. More than half (61%) say the biggest benefit of being a caregiver is feeling that they’re doing the right thing.
Figure 2: The Biggest Benefits of Caregiving
The personal satisfaction caregivers experience cuts to the heart of their values. Almost all caregivers (91%) told us they feel grateful for the chance to provide care. “At first it was just scary and stressful,” one focus group participant told us, “but I got to know my mother-in-law more deeply. And I learned so much about myself.”
Caregiving seems to give back almost as much as it takes from the caregiver. Most (65%) report that caregiving has brought meaning and purpose to their life, and over three-fourths (77%) report that they would gladly take on being a caregiver for another loved one. It also often serves as a wake-up call and motivates most caregivers to take better care of their own health (86%).
3. Money is an essential part of the caregiving equation.
Money may not be the first thing that comes to mind when you think about caregiving. Few people talk about it, but finances are an integral piece of the puzzle. So what exactly is involved in financial caregiving? There are two distinct but related parts of the equation, often done by the same person: contributing financially to the cost of care and coordinating the financial care of a loved one, which might include paying bills, managing investments, preparing taxes, handling insurance, and monitoring accounts.
Figure 3: Percent of Caregivers Who Are…
According to AARP, the average caregiver spends $7,000 on caregiving per year, which goes toward paying for personal, medical, and household needs. However, more than half (52%) of respondents to our study have no idea what they have spent on caregiving related expenses. Many contribute to the care of their loved one even if it’s detrimental to their own financial future.
Few have thought through or saved for the potential need of caring for a loved one or for needing care for themselves in the future. AP-NORC Center for Public Affairs Research reports only one-third of adults over 40 say they have money set aside to pay for their long-term care, and few have insurance policies to help cover their future potential care needs.
The cost of caregiving is not easy or comfortable to talk about. Seventy-five percent of family caregivers have never discussed their financial role with their care recipient. It could be that talking about money is taboo, especially in the face of illness, or that the care recipient does not have the mental acuity to discuss finances. But the financial burden and emotional toll can be minimized if families talk it through and plan appropriately. As Lorna Sabbia, head of Retirement and Personal Wealth Solutions for Bank of America Merrill Lynch explains, “Earlier, more comprehensive planning and innovative solutions to address health and long-term care needs of our loved ones can help ease the stress of caregiving for both caregivers and their loved ones.”
What can you do to prepare? Whether you are a caregiver or care recipient, there are two essential steps to take.
1. Talk openly with close family in advance. Start the “what if” conversation. It doesn’t have to be done all in one sitting. Thinking this through ahead of time can help prevent headaches and heartaches down the road. Here are some topics to cover:
- Where do you want to live? There are practical and financial implications of remaining at home, which is what most people say they want to do.
- Who do you want to handle different aspects of your care? Would you prefer the same person to handle your finances and provide hands-on care if you need it? By identifying who performs different tasks, you and your loved ones can have greater clarity as well as get legal authorizations, e.g. power of attorney.
- What are your medical preferences and desires? It’s important to discuss what medications and treatments are acceptable—and not—in case you cannot advocate for yourself. A living will, or advance directive, is essential.
- Where are important medical, legal, and financial documents? This can save hours of searching and guesswork. Include information about passwords, insurance, medical history and providers, and any legal documents.
- How will you pay for health care expenses and caregiving needs? According to Age Wave/Merrill Lynch research, health care expenses are the number one financial worry in retirement, and 77% of people say they don’t know how much they need to save for health and long-term care costs in retirement. Neither Medicare nor Medicare supplemental coverage fully cover long-term care. Creating a financial plan to protect the interests of both the caregiver and care recipient is an important first step. Getting help from a professional to understand choices and navigate the complexities of options is often a smart choice.
2. Seek guidance and support: Having people you can trust and turn to in times of need can make the journey easier. Here are some resources you may want to utilize as part of an extended care team:
- Caregiver peers: Our research revealed the power of peer learning. Caregivers readily share tips, tools, and services. New online platforms like AARP’s Caregivers in the Community (CINC) app are facilitating peer learning and support. Many communities also offer caregiver support groups.
- Care specialists: Sometimes called geriatric care managers, they can help with issues such as home modifications, resolving conflicts between family members, and finding local resources. AgingLifeCare.org allows you to find geriatric care managers in your area. Some employers offer access to care specialists through employee benefits.
- Employer support: Employers can play an integral role in supporting caregivers. Find out what, if anything, your employer might offer in terms of caregiving benefits. As Andy Sieg, Head of Merrill Lynch Wealth Management, points out, “Eldercare is the employee benefit of the future.”
- Financial & legal professionals: Financial institutions and law firms employ specialists such as financial gerontologists and elder law specialists who can navigate the unique challenges caregivers and care recipients face.
- Friends and family: Forty-four percent of caregivers from our survey said they often feel isolated. Make an effort to keep ties with family and friends, and ask for help.
- Professional caregivers: Not everyone has family members or friends who can provide respite. Professional caregivers can help tremendously, including home care aides and adult day care centers. Arch National Respite Network and Resource Center helps caregivers find respite resources, including free programs funded through state and federal government.
Founded in 1986, Age Wave is a pioneer in the exploration of the business, economic, social and personal impact of the longevity revolution. Under the leadership of Founders Ken and Maddy Dychtwald, Age Wave advises businesses, governments and non-profits worldwide on the opportunities and challenges of an aging population. More than half the Fortune 500 and numerous non-profit and government groups worldwide have been clients of Age Wave. www.agewave.com