Baby boomers are making serious financial sacrifices to be caregivers, data shows
This week’s edition of Money in the Media Monday we’ll be discussing an USA Today article “Baby boomers are making serious financial sacrifices to be caregivers, data shows.” As the baby boomer and silent generations age, those whose health is failing must rely on their relatives and friends to care for their needs is increasing.
Of those are are caregivers 68% are caregivers for their aging parents, while 17% are providing for their spouse/partner or in-laws. With an average of 10,000 baby boomers hitting age 65 every day, the number of those that need care will only increase.
As someone who has been one of the caregivers for my father for the past decade, being a caregiver is no simple task. My mom has seen the brunt of the effect from this responsibility. In order to provide my dad with the best care, she has had to:
- Adjusting work hours
- Moving to a new home
- Making major financial changes to qualify for state and federal aid programs
- Eliminate travel for years; once travel was added back into the mix, it was local and minimal.
This aligns with the data found in the report completed by the Center for a Secure Retirement, which showed that of those that are currently caregivers:
66% will reduce spending.
41% will travel less.
27% will move to a new home.
27% will cut back on hours at work.
19% will stop working altogether.
Not to mention that the odds increased that a caregiver will have to withdraw for their retirement funds in order to pay for healthcare costs. This was also true in my own family.
While these facts can sound scary, they may not properly convey the all consuming responsibility that a caregiver must undertake. In addition to the larger sacrifices listed above, the small everyday sacrifices can be what wears the most.
Taking over all personal responsibilities the person in need had previously completed on their own. This includes anything from home maintenance and paying bills to taking a bath and going to the bathroom. Not only can this be time consuming, preventing the caregiver from pursuing other opportunities, it can wear on a person’s resolve when done for weeks, months, years at a time.
What Do I Do?
Have the Talk
The most important thing is to talk those around you that are at higher risk for needing long term care (LTC). This may not be an easy thing to do, but it can be made easier if you begin the discussion from the perspective that you want to put plans in place for yourself. Use this as a reason to ask them what to prepare for a disability or LTC needs.
The ideal wold be to lead that conversation with them in order to determine:
- What they would want if they were to require LTC?
- Would they want/need you or another loved one to stay at home to care for them?
- What documentation do they have in place for this (will, POA, insurance)?
- How are they thinking that they will pay for any needed care that they may require?
Create a Plan- For Them AND You
Based on your talk with them, they may be all set and ready to face any LTC needs they may have. Considering that the average baby boomers have saved $152,000 in total household retirement savings, this is most likely not the case. Use the information you learned in your talk with them to build out a plan. This plan can include:
- Disability Insurance
- Long Term Care Insurance
- Checking eligibility for state and federal programs like Medicare (many have a 5 year look back so planning ahead is KEY)
- Evaluating retirement savings vs expected expenses
Once they have a plan laid out, take the time to have the same talk with yourself. What would you want? How do you plan to prepare for it? Facing these questions head on will save you and your loved ones time, money and mental health in the future.
Are you a caregiver? Do you plan to become one in the future? Do you have a plan for your own long term care? Let me know in the comments below!