The online version of Financial Planning magazine had an interesting write up on July 27th that I want to share with you. The gist of the story is the cost to the family when one member of the family relies on another to provide unpaid care. We all know that the long term care provided by trained professionals is expensive. It is also important to know that the “free” care provided by family members can be a financial burden also. We need to understand that, whether unpaid care is a voluntary choice or rely on it out of necessity, the costs are significant. Here are some examples from a 2015 AARP study. In 2014, about 60% of caregivers were employed either full time or part time and faced competing demands from their workplace. About 40% of the caregivers were 50-plus years old. Of those surveyed, 49% made adjustments with working hours, 15% took a leave of absence, 7% received performance warnings and 5% had to turn down promotions as a result of care giving. Even more disturbing is that 22% of retirees left the workforce early to care for an ill spouse or family member. Not only does the family have the medical expenses, but also suffers a loss of income.
Where does the money come from to provide care? The survey found that about 68% of family caregivers used their own money to provide care for a relative. This typically means that saving for other financial goals like retirement or children’s education get put on hold, creating even more stress for the family. If you are 30 years older than your children, you will be in your late 80’s when you may need caregivers. If you have not provided for these expenses, you are going to asking for help from your children who will be in their 50’s and probably trying to help their children with college expenses or weddings or grandchildren. The two don’t mix very well and someone is not going to be happy. There are also “non-cash” considerations. About 88% of middle income participants in the survey indicated that family care giving requires more patience, emotional strength and time than estimated. Also, personal care like helping one bathe or go to the bathroom may impose additional physical and psychological burdens. Finally, from the other side of the fence, businesses face $25 billion in lost productivity due to absenteeism among working caregivers. In 2013, the estimated economic value of unpaid family care giving was $470 billion from caregivers offering 37 billion hours of care for spouses, partners and other loved ones. Guess that vow “for better or worse” hits home sometimes.
God knows that you can’t do this work by yourself. Know that you have a partner. Do you remember what happened in Numbers 11? The Lord said to Moses, ‘Gather for me seventy of the elders of Israel, whom you know to be the elders of the people and officers over them; bring them to the tent of meeting, and have them take their place there with you. I will come down and talk with you there; and I will take some of the spirit that is on you and put it on them; and they shall bear the burden of the people along with you so that you will not bear it all by yourself”. So Moses went out and told the people the words of the Lord; and he gathered seventy elders of the people and placed them all around the tent. Then the Lord came down in the cloud and spoke to him, and took some of the spirit that was on him and put it on the seventy elders”. And from Isaiah: “But they that wait upon the Lord shall renew their strength; they shall mount up with wings as eagles; they shall run, and not be weary; and they shall walk, and not faint.”
Although this information has been gathered from sources believed to be reliable, it cannot be guaranteed. This material is intended for informational purposes only and should not be construed or acted upon as individualized tax, legal or investment advice. FSC Securities Corp does not offer tax or legal advice. Securities, insurance and investment advisory services offered through FSC Securities Corporation, member FINRA/SIPC and a registered investment advisor 3416 North Blvd, Alexandria, LA 71301, (318) 448-3201. The views expressed are not necessarily the opinion of FSC Securities Corporation.