The Financial Stress of Family Caregiving - A Hidden Challenge
By Don Drake, Connelly Law Offices, Ltd.
"The challenges posed by the aging baby boomer generation to the U.S. economy are unique and unprecedented, and with a population of seventy-three million, this group is rapidly reaching retirement age, and many of them are unprepared for the financial stress of family caregiving and the significant costs of specialized care," stated professional fiduciary and certified elder law Attorney RJ Connelly III. "In fact, approximately 10,000 Baby Boomers turn sixty-five every day and are living longer than ever. Since Social Security's inception in 1935, life expectancy has risen by 17 years. As a result, individual families face an increasingly ruinous financial burden, with little help from state or federal lawmakers."
"Making decisions about managing the final years and decades of life can be overwhelming, and one that is often put off or ignored entirely," said Attorney Connelly. "I totally understand that this is a complex emotional and financial issue, which makes it difficult to discuss. However, this discussion must occur, sooner rather than later since options for individuals and families are limited. Home care aides are in short supply, and nursing homes are often perceived as being overly institutionalized, with limited freedom for seniors, and other senior housing and care options are usually financially out of reach for the average American."
Attorney Connelly brought attention to the fact that due to the exorbitant expenses associated with elder care, numerous families decide to keep their elderly relatives suffering from dementia or other ailments in perilous conditions at home. These aging individuals are often left alone or cared for by their aging spouses, extended family members, or volunteers. This situation can lead to a multitude of difficulties and hazards, such as social isolation and inadvertent neglect and abuse. Adult children may also choose to disrupt their own lives to provide care for their aging parents or relatives, which can have severe consequences for their own individual and family well-being and financial stability.
The expenses associated with caregiving can strain a caregiver's budget, particularly due to the physical and mental challenges that make care more costly. Furthermore, if the elderly family member has dementia, it requires specialized care that can cost upwards of $300,000 over their lifetime. Home modifications to ensure safety and medications can add up to a monthly cost of $400 or more.
"In our previous blog posts, we discussed the significant emotional impact of caregiving on individuals, but caregiving also has substantial financial costs that need to be addressed," said Attorney Connelly. "In-home care services can cost upwards of $50,000 annually, making it unaffordable for many. Although Medicaid is available for low-income Americans, not everyone qualifies for it, and those who do qualify find navigating the Medicaid system to be a complex process, and waiting times for care can be lengthy."
Caregiving and Finances
A report by the TIAA Institute and the University of Pennsylvania School of Nursing sheds light on the financial implications faced by unpaid caregivers as they provide care to their loved ones. According to the report, one out of every five adults provides unpaid care to a family member or loved one with health issues. This means that millions of Americans are currently providing unpaid care to their loved ones.
"According to this report, the financial impact of caregiving has been largely ignored despite being a significant burden on caregivers' finances," stated Attorney Connelly. "The report also highlights the fact that caregivers face expenses amounting to over $7,000 per year, which they pay out of their own pockets for housing, healthcare, and transportation. These expenses can cause significant financial strain, forcing caregivers to make tough financial decisions such as dipping into their personal savings, using credit cards with high interest rates, neglecting bills, or reducing their retirement contributions. As a result, caregivers have lower financial assets and carry more debt than those who do not provide any type of care."
The fiscal impact of caregiving also extends to the workplace. While three out of every five caregivers have jobs outside of the home, caregiving typically necessitates twenty-plus hours a week. This means that caregivers often experience difficulties balancing their caregiving responsibilities with their jobs, causing them to arrive late, leave early, take time off, or retire earlier than planned. This creates additional financial challenges and reduces their income.
A Final Word
"In light of the current trends, it is crucial for fiduciaries and elder law attorneys to address these challenges facing seniors and their families when planning for future needs," said Attorney Connelly. "At Connelly Law, we understand the intricate and unique requirements that individuals and families encounter in matters pertaining to estate planning, Medicaid planning, and long-term care. During planning sessions with our clients, we consider all relevant factors and develop a comprehensive and pragmatic strategy that employs an integrated approach. Our objective is to assist clients in building a retirement nest egg while providing them with appropriate planning and access to resources that ensure their long-term care needs, and those of their loved ones, are met."
"As an attorney who understands the challenges of aging and caregiving, I know that it's not a one-person job," added Attorney Connelly. "We take the next step of building meaningful relationships with social workers, healthcare agencies, and other senior care professionals. By doing so, we establish connections that truly benefit our caregiving clients and their families. Through these connections, we ensure that our clients have access to a wide range of resources and support throughout their caregiving journey. This way, our clients can get the best possible care and support, even in the face of difficult circumstances."
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