One in five adults now provide uncompensated care to loved ones with health problems. A new report by the TIAA Institute and the University of Pennsylvania School of Nursing provides a comprehensive compilation of insights and research that underscores how the caregivers face a series of financial and professional challenges. On average, the caregivers’ uncompensated expenses—things like housing, health care, and transportation—add up to more than $7,000 a year, pushing almost half of them to say they’ve suffered financially. Many feel they have no choice but to withdraw money from savings accounts or retirement nest eggs, take on debt, pay bills late, or scale back on their retirement contributions.
The impact also extends into the workplace. Caregiving typically requires 24 hours a week, and about 60% of caregivers have jobs outside the home. As a result, 61% of those caregivers reported at least one work-related consequence, such as arriving late, leaving early, taking time off, or retiring sooner than planned.
The report comes as the need for caregivers will likely skyrocket. Each day, about 10,000 baby boomers turn 65, and they’re living longer than ever. Life expectancy has risen by 17 years since the Social Security program debuted in 1935. The report also reveals that caregivers have lower levels of financial assets and higher levels of debt compared to those who don’t care for loved ones.
“As younger generations increasingly take on caregiving roles, they face different financial pressures and trade-offs,” says Mary Naylor, director of Penn Nursing’s NewCourtland Center for Transitions and Health. “The financial choices made at younger ages have ripples for years to come, as families weigh the relative importance of present spending, saving for large expenses and saving for retirement.”
The report outlines several ways financial advisors and employers can support caregivers as they cope with their emotions, finances, and careers. Financial advisors, for instance, should take a more holistic view of the way they help clients. It’s no longer about simply building a nest egg for retirement. It’s about working with a family to prepare for the emotional, physical, and financial burden of a longer life span, the risks and caregiving issues that could occur at any point and the short- and long-term tradeoffs that come with different decisions.
Read more at Penn Nursing News.