Home About Archives RSS Feed

The Independent Investor: Cost of Caregiving Keeps Climbing

By Bill SchmickiBerkshires columnist
If you thought the nation has problems with Social Security and Medicare, you ain't seen nothing yet. Today, more than two-thirds of Americans assume they will be able to rely on a family member to meet their long-term care needs if needed. My advice: don't count on it, and here's why.
 
As it stands today, one-third of all U.S. families provide long-term care for a disabled or elderly family member. You may have guessed that two-thirds of those caregivers are women, although why it should be deemed a woman's task alone is beyond me.
 
If you want to look at the upside to care-giving, you could say that caring for a loved one who needs our help, is a chance to pay back all the love and support we received when growing up. On a good day of care-giving, there may be an immense satisfaction in helping to preserve an individual's quality of life, whom you love, while lifting their increasingly difficult burden of completing daily tasks.
 
The downside of care-giving is well-documented. The economic, emotional and mental strain of care-giving is, at times, overwhelming. And it snowballs. Family relationships often suffer and tension among spouses is commonplace. care-giving also takes a toll on your health and plays havoc with your work-life balance.
 
In 2013, according to the AARP, about 40 million families provided 37 billion hours of care, which was worth an estimated $470 billion. That nearly equaled the yearly revenues of the country's four largest tech companies combined. In 2016, AARP estimated that, in addition to the physical care-giving, the average out-of-pocket expense per family was almost $7,000 a year. That can amount to 20 percent of an average family's income per year.
 
The economic impact can be devastating. To cover the additional expense, many families have to cut back on their own spending. They usually do this by short-changing their retirement savings and contributions. Since it is the woman (who also happens to be a wage earner) that most of the burden falls upon, there is a higher chance that she will be forced to give up full-time work in order to become a caregiver.
 
It is estimated that 17 percent of caregivers dealing with a parent with dementia will quit their jobs. The majority of caregivers who maintain employment, arrive late to work or leave early. About 15 percent of them are forced to take a leave of absence and 7 percent lose job-related benefits.
 
More than 10 million caregivers, over 50 years old, lose $3 trillion in wages, pensions, retirement funds and other benefits. Of that, women lose an estimated $324,044, while men lose much less ($124,693).
 
If that sounds pretty grim, just wait. Digging deeper, we find that the caregiver support ratio back in 2010, was more than 7 potential caregivers for every person in the high-risk years of age 80-plus, according to AARP. By 2030, that ratio will fall to 4 to 1, and by 2050, it will drop to 3 to 1.
 
As such, the decade between the 2010s and 2020s will be a transition period when Baby Boomers age out of their peak care-giving years and the oldest Boomers transition into the 80-plus high-risk years. Now, here's the zinger:
 
"The departure of the boomers from the peak care-giving years will mean that the population aged 45-64 is projected to increase by only one percent between 2010-2030. During the same period, the 80-plus population is projected to increase by a whopping 79 percent," according to Annalee Kruger, the founder and president of Care Right, a Florida-based firm that provides advice and aging planning for caregivers and their families.
 
Kruger, an expert in the landscape of health care, (the subject of her master's thesis), fears that a real crisis is brewing in America. As the family unit in America continues to shrink while living further and further apart, seniors should not simply assume that a family member will take care of them when the time comes.
 
In my next column, I will provide more of Annalee Kruger's insights in how to plan and prepare for this coming crisis.
 
Bill Schmick is registered as an investment adviser representative and portfolio manager with Berkshire Money Management (BMM), managing over $400 million for investors in the Berkshires.  Bill's forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.
0 Comments
     

Support Local News

We show up at hurricanes, budget meetings, high school games, accidents, fires and community events. We show up at celebrations and tragedies and everything in between. We show up so our readers can learn about pivotal events that affect their communities and their lives.

How important is local news to you? You can support independent, unbiased journalism and help iBerkshires grow for as a little as the cost of a cup of coffee a week.

News Headlines
Owner of Abandoned Cats Pleads Guilty to Animal Cruelty
Pittsfield's Kalinowsky Seeks Voters' Input on North Street Traffic Confirguration
Upcoming Nursing Accreditation Review Visit at BCC
Weekend Outlook: Jan. 27-29
Clark Art Screens Experimental Animation Short Films
Williams College: Imani Perry 'South to America'
MassDOT Advisory: West Stock Bridge Gaurdrail and Bridge Repair
Adams COA, Town Seek Funds for Memorial Building Bathrooms
BCC Holds Pinning Ceremony for the Inaugural January Class
Berkshire NAACP Freedom Fund Awards Honor Activists
 
 


Categories:
@theMarket (435)
Independent Investor (451)
Retired Investor (126)
Archives:
January 2023 (6)
January 2022 (1)
December 2022 (7)
November 2022 (7)
October 2022 (8)
September 2022 (9)
August 2022 (5)
July 2022 (7)
June 2022 (7)
May 2022 (7)
April 2022 (8)
March 2022 (9)
February 2022 (7)
Tags:
Fiscal Cliff Interest Rates Stimulus Commodities Banking Energy Employment Debt Federal Reserve Stock Market Bailout Pullback Deficit Metals Europe Currency Markets Taxes Jobs Retirement Recession Oil Debt Ceiling Banks Selloff Economy Greece Euro Crisis Election Rally Congress Stocks Europe Japan
Popular Entries:
The Independent Investor: Don't Fight the Fed
Independent Investor: Europe's Banking Crisis
@theMarket: Let the Good Times Roll
Independent Investor: Enough Already!
@theMarket: Let Silver Be A Lesson
The Independent Investor: Japan — The Sun Is Beginning to Rise
Independent Investor: What To Expect After a Waterfall Decline
@theMarket: One Down, One to Go
@theMarket: 707 Days
The Independent Investor: And Now For That Deficit
Recent Entries:
@theMarket: Macro-Economic Data Indicate a Soft Landing
The Retired Investor: Back to the gym
The Retired Investor: The Billionaire Lottery
The Retired Investor: Beware Political Pollsters
@theMarket: Markets Are Stuck in Chop City
The Retired Investor: U.S. Income Inequality
@theMarket: Good News on Economy Is Bad News for Stock Market
The Retired Investor: Are Christmas Trees Worth It?
@theMarket: Markets at Odds With the Fed
The Retired Investor: Why the Stock Market Needs to Decline