As life expectancy continues to rise and medical costs increase, many adult children who take on the responsibility of caring for their aging parents are finding themselves faced with quite a dilemma. Because many simply don’t have the financial means for professional care, they’re faced with administering a considerable portion, if not all, of the care themselves.
As I was recently doing some research about this trend, I came across some interesting statistics and pieces of information that I found very useful. I hope you also find them helpful as you are meeting with clients and helping them prepare for end of life care.
Out of Pocket Costs
Caring.com performed a study to get some concrete data on what family caregivers are spending to provide care for their aging parents. Here are some statistics that demonstrate just how much it costs:
- Nearly half of family caregivers spend more than $5,000 annually
- 16% are spending as much as $9,999
- 11% are spending as much as $19,999
- 5% are spending as much as $49,999
The costs associated with caregiving add up over time and often put adult children in a difficult position. While they’re spending time and money caring for their parents, it often means they’re unable to put money into their own retirement funds.
Loss of Earnings and Benefits
Aside from the out of pocket costs, many caregivers have to take time off from work to administer care. Whether it’s driving their parents to doctor appointments, assisting with feeding or helping with bathing and hygiene, being a sole caregiver can be very time consuming. As a result, many people find themselves forced to take unpaid leave, reduce their hours or leave their jobs altogether to ensure their parents receive proper care.
In turn, this can lead to a dramatic loss of earnings and benefits, which not only affects long-term savings, but day-to-day living as well. Depending on whether an adult child has to take unpaid time off from work or potentially leave their job entirely, the cost in lost wages can be very damaging. Combine lost wages with other costs such as medicine, doctor’s appointments, and hospital stays and the challenge can seem insurmountable.
In addition to out of pocket costs and reduction of earnings, many people experience a negative backlash with employment as well. For example, employers may grow tired of employees who constantly require time off or show up late because they had to care for their parents. Not only can this create tension in the workplace, it sometimes leads to termination, and positions are replaced by employees who don’t have these obligations.
Even though care for an ailing family member is protected under the federal Family and Medical Leave Act, many employers will still terminate employment. The challenge may also arise that an adult child with a high-paying job who has a family of their own to support must leave their job in order to keep up with the demands of caring for loved ones, which is damaging to someone attempting to build a career.
The bottom line is that people living longer into their golden years is a double-edged sword. On one side, it’s great for those aging parents and grandparents to have more time with their families. However, on the other side, many outlive their savings, and their adult children are faced with a difficult situation where they suffer financially and emotionally during the process.
Planning ahead for end of life care becomes increasingly important in our aging society. Talking with your clients (and their children) about how to prepare for future costs and caregiving can help them avoid some of the stress of growing older.
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (800) 846-1555