Shock for Many: Family Caregiving Cost Very High
The AARP says that our nation's 40 million unpaid family caregivers are devoting a large portion of their own money toward the care of their loved ones. Most people know by now that the advances in medical science have made longevity a significant concern.
The financial costs and burdens of aging impact more than just you and your savings, it impacts your family. With no plan in place, your plan is your family. Your children will have their own careers, families, and responsibilities. The problem is being a family caregiver makes life even more stressful.
Impact of Aging is Placed on Family Members
Approximately 1 in 7 adults in the United States — about 40 million people — provide some level of unpaid care to another adult, according to a 2018 Pew Research Center analysis of U.S. Bureau of Labor Statistics data. Often it is a parent or in-law.
Caregiving is Hard
Being a caregiver is not easy work. These adult caregivers spend almost 80 minutes a day, on average, providing help and assistance. This includes many things most of us take for granted. These include things like bathing, dressing, eating, paying bills, routine home maintenance, basic medical care, and transportation to and from appointments, according to Pew researchers.
Paid care services are also needed at some point to add to, or replace the unpaid services provided by family members. The paid care drains assets and harms a couple's lifestyle.
Spouses Usually Not the Best Caregivers
A spouse is usually much older when the other spouse requires long-term care services and supports. Typically, the wife will become the default caregiver for the husband. The problem is two-fold. First, an older woman will find it very physically difficult being a caregiver. Even if the woman is younger, the stress and impact on health, including mental health, is very significant. Second, by the time a woman requires long-term care services and supports, the husband is either already passed or physically unable to be a caregiver.
The end result means caregiving will fall to a daughter or daughter-in-law when no advance plan exists. Even if assets are available to pay for professional and semi-professional care services, the family will still be involved in managing that care. Usually, at some point, savings will run out and place the person either in a Medicaid situation or forcing family to take on even more responsibility.
Family members are spending an average of $6,954 a year — nearly 20 percent of their income — on out-of-pocket costs related to caregiving, according to an AARP study, "Family Caregiving and Out-of-Pocket Costs: 2016 Report."
Paid Care Services Continue To Get More Expensive
Since that study was published, the cost of long-term care services has gone up. According to the LTC NEWS cost of care calculator, a skilled nursing home averages nationally over $100,000 a year. The good news most long-term care is no longer delivered in nursing homes. The bad news, all types of care services are still expensive.
The national average for the base cost of an assisted living facility is now almost $51,000 a year. One year of care at home, based on a 44 hour week, now averages over $53,000 a year. The cost of these services varies depending on where in the country you reside in. Access the LTC NEWS cost of care calculator by clicking here.
Don't forget these family members have their own families, careers, and responsibilities. Being a caregiver adds additional financial strain on top of other financial pressures many caregivers face, such as needing to cut back on work hours or take unpaid leave.
Read the full story from AARP here: https://www.aarp.org/caregiving/financial-legal/info-2017/out-of-pocket-cost-report.html?intcmp=AE-HF-RELBOX1
The AARP report indicates many of these unpaid family members actually dip into their own savings to help provide additional paid care. Read this story from the AARP on the impact of unpaid caregivers on American families: https://www.aarp.org/caregiving/financial-legal/info-2019/out-of-pocket-costs.html
The question is, how will you be different than older parents? There is an easy and affordable solution many Americans have discovered. Long-Term Care Insurance will provide tax-free resources for care at home or in a facility. Also, most plans include case management, which helps the family develop a plan of care and help make arrangements and recommendations for care.
This directly eases some of the burden placed on family members. Even a small policy can provide a significant amount of home care, which would at least reduce some of the burdens on loved ones.
Affordable Solution: Long-Term Care Insurance
While many Americans hate the idea of buying another insurance policy, affordable Long-Term Care Insurance provides the peace-of-mind that your future aging and health will not become a significant burden on your family members. Indeed, it will protect assets, but it really allows a family to be family.
A recent CNBC report, "If you're in your 50s, you need to plan for long-term care right now "https://www.cnbc.com/2018/06/22/if-youre-in-your-50s-you-need-to-plan-for-long-term-care-right-now.html says the time to plan is well before retirement.
LTC NEWS Tools Provide Research Help
Forty-five states offer Long-Term Care Partnership policies. These policies provide additional dollar-for-dollar asset protection. See if your state is one of those states which offer this unique type of Long-Term Care Insurance policy - just click here.
Depend on LTC Insurance Specialist for Accurate Information
Be sure to work with a qualified Long-Term Care Specialist as opposed to a financial advisor or general insurance agent. These specialists work with all the major companies, understand underwriting for each company, and can design an affordable plan based on your specific situation.
You need to do more than just get quotes, the quotes need to be accurate, and the recommendation should be based on a full understanding of long-term care. A specialist can provide that advice.
Local Agent Usually is Not Qualified for Long-Term Care Planning
Understand that the best advice may come from a specialist who is not local. Because there are so few top specialists, many of them help consumers nationwide by telephone and the internet. The insurance company is not local either, so this should not be a concern.
The right specialist will save you money and provide much more expertise than a person who is local but probably never even processed a Long-Term Care Insurance claim.
This LTC NEWS story explains why this is important: https://www.LTCnews.com/articles/local-insurance-agent-may-not-be-qualified-for-long-term-care-policies.
Make Plans Prior to Retirement
You will find that Long-Term Care Insurance is easy and affordable, especially when you plan before retirement, ideally in your 40s or 50s, when you still can take advantage of good health discounts and multiple options.
Remember, Long-Term Care Insurance is underwritten based on your health history. This means your current health will impact your ability to obtain coverage and even the cost — items like the medications you are taking, and other factors will be reviewed. Every company has different rules. You will have to answer questions to get an accurate quote.
Add peace-of-mind to your retirement plan by planning now for the financial costs and burdens of aging. Don't place this responsibility on your loved ones.