Caring for a family member requires a substantial allocation of time and energy, and for nearly half of families providing care for a loved one, their savings feel the brunt of the impact, according to a new report from Caring.com.
About 46% of family caregivers spend more than $5,000 per year on caregiving expenses, as highlighted by Caring.com’s Senior Care Cost Index survey of 1,345 family caregivers from June 26 through July 20.
A family caregiver is defined as someone who cares for a family member of friend without receiving payment for their services, which may include out-of-pocket costs for medications, medical bills, in-home care, senior living communities and more. About 54% of respondents said they care for a parent or spouse/significant other.
Though the annual expenses may seem pricey when thinking in terms of out-of-pocket spending, most are still paying well below the $42,000 median annual cost of care in a single-occupancy assisted living unit, according to the 2014 Genworth Cost of Care Survey.
Of the 46% who spend more than $5,000 annually, 16% spend between $5,000-$9,999, while 11% said they spend from $10,000 to $19,999.
Only 7% of respondents said they spend $20,000-$29,999; while another 7% claimed to spend more than $50,000 on out-of-pocket caregiving each year. Despite the considerable costs, only a slim percentage of caregivers have spoken to their loved ones about how to finance care (3 in 10).
“Caregiving can be a startling endeavor that most people aren’t financially prepared for,” said Caring.com CEO Andy Cohen in a written statement. “Having an open and honest conversation about finances is a sensitive, but necessary decision to have.”
A much-needed conversation is also imperative not only for its effect on finances, but also how caregiving impacts current employment and retirement plans.
A little more than one-third (33%) spend more than 30 hours per week on caregiving, making it almost the equivalent of a full-time job, notes Caring.com. While half of caregivers have made changes to their work schedules to accommodate caregiving, 30% often arrived late or left work early and 17% missed a significant amount of work.
“Family caregivers, especially baby boomers, run the risk of derailing their retirement plans if they don’t prepare for the costs associated with caregiving,” 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.”
For 43% of family caregivers, deciding on a senior care or senior housing option only took one month, however, the same decision process took six months or more for 21% of caregivers. For 10% of respondents, the decision-making process took more than a year.
When broken down into settings where individuals are receiving care, only 20% of people being creed for live in assisted living, nursing homes or other senior living communities.
Written by Jason Oliva