Caregiving and Your Financial Future

What happens when a loved one’s needs increase and you, as a caregiver, are faced with the daunting responsibility of providing extensive care?

Perhaps caregiving started with transporting the loved one to doctor appointments or the supermarket, and now the loved one cannot safely be left alone for any length of time. For any of us looking on, the prescribed response looks simple: “Well, just weigh your options and find a way to increase the care!” However, it is far from easy—especially when attempting to juggle other major life roles such as parenting and employment. Frankly, as a loved one’s needs increase, you often face difficult choices.

It has long been recognized that the emotional and physical costs of caregiving can be significant; studies consistently have shown that caregivers are at higher risk for depression and serious, stress-related physical problems than non-caregivers.  Now, thanks to the concerted efforts of organizations such as the Center for American Progress, the Indiana Institute for Working Families, AARP and the National Alliance for Caregiving, we are gaining much-needed clarity about the sometimes extreme financial sacrifices made by caregivers, as well. 

The economic impact of caregiving

  • A survey of 7,660 people by AARP and the National Alliance for Caregiving  in June 2015 indicates that 60 percent of caregivers are also employed. These caregivers not only provide a crucial service to family members; their participation in the workforce is essential to our society.
  • In a 2016 report, “The Cost of Work-Family Inaction,” the Center for American Progress found that the lost wages from lack of access to paid time off costs the American economy $20.6 billion per year.
  • AARP’s 2016 report, Family Caregiving and Out-of-Pocket Costs, demonstrates that:
    1. Caregiving can often alter one’s ability to cover expenses and maintain standard of living. Caregivers report that they have had to:
      • cut back on personal spending to meet caregiver expenses (35%)
      • work different hours in order to meet caregiving obligations (32%)
      • dip into personal savings in order to cover caregiving-associated costs (30%)
      • take paid time off (29%) or unpaid time off (22%)
      • work fewer hours to meet caregiving obligations (20%)
      • work more hours to cope with the financial strain of caregiving (15%)
      • take an additional job in order to ease financial stress associated with caregiving (7%)
    2. Statistically, caregiving tends to interfere with the caregiver’s ability to manage his/her own financial future. Caregivers report having to:
      • reduce the amount they put into retirement savings (16%)
      • tap into retirement savings (11%)
      • borrow money, take out loans (10%)
      • retire early or resign (8%)

These statistics impact not only caregivers, but also have a ripple effect on all of society.

  • Losing talent in the labor force when someone has to stop working impacts industry, production, sales, and other important operations within a society.
  • A caregiver’s loss of income and benefits (including health insurance) can increase dependence on government systems.

Perhaps it is time we seriously examine the unique function of family caregiving in this nation and consider measures to protect and meaningfully support those who assume this critical role.


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