There are 40.4 million unpaid caregivers of adults ages 65 and older in the United States, according to data from the Bureau of Labor Statistics. The unpaid care they provide is estimated to be worth $470 billion per year in a report by the AARP Public Policy Institute.
Many caregivers are hesitant to move a loved one to a residential care facility — whether due to feelings of guilt, concern about the quality of care, or the expenses associated with long-term care — and they mistakenly believe that caring for their loved one at home is more affordable than professional senior care.
However, providing in-home care is fraught with financial risks and personal sacrifices, too.
Here’s a look at four costs of caregiving that should be considered before committing to becoming the full-time caregiver for an older loved one.
Family caregivers spend an average of 24.4 hours per week providing care, and nearly 1 in 4 caregivers spends 41 hours or more per week providing care, according to the National Alliance for Caregiving and AARP. So it’s not surprising that caregivers often have to take time off, either paid or unpaid, while some have to reduce their work hours.
According to a study conducted by the MetLife Mature Market Institute, in conjunction with the National Alliance for Caregiving and the New York Medical College, for the typical woman, the lost wages due to dropping out of the labor force because of adult caregiving responsibilities averages nearly $143,000.
Some caregivers leave the workforce entirely in order to provide full-time care for a loved one, and they may struggle to get another job when their time as a caregiver comes to an end.
How are you supposed to grow your skills, stay tuned to trends in your industry, discover new career opportunities, and grow personally all while helping to shop and buy groceries, arranging the medical appointments and transportation to the doctor or clinic, preparing meals, cleaning the house, or doing laundry — for your family and for your loved one.
Combine high unemployment with a competitive labor market, and caregivers who leave the workforce for months or years often find that it’s difficult to get another job.
Increased Health Care Costs
According to AARP’s Family Caregiving and Out-of-Pocket Costs Report, 78 percent of family caregivers incur out-of-pocket costs. In 2016, family caregivers spent an average of $6,954 as a result of caregiving, typically about 20 percent of a caregiver’s income.
Not only do costs for caring for a loved one put financial strain on caregivers, but caregiving also has an impact on the physical health of caregivers, with 17 percent reporting that they feel their general health has gotten worse. Between 40 and 70 percent of family caregivers caring for aging adults have clinically significant symptoms of depression. This translates into increased health care costs for family caregivers, especially among those who have lost their own health insurance because they left their job to become caregivers.
Lost Savings and Retirement
Not only do family caregivers have to cut back on personal spending to meet caregiving expenses, but one-third of caregivers say they’ve also had to dip into their savings in order to cover caregiving-associated out-of-pocket costs, according to the AARP report.
More than 15 percent of family caregivers say they've had to reduce the amount the put into retirement savings, and 11 percent have even tapped into their retirement savings to cover costs associated with caregiving.
One reason that caregiving is so costly is that caregivers typically spent more time providing care than they anticipated. The average duration of a caregiver’s role is four years, with only 30 percent of caregivers providing care for less than a year. Nearly 25 percent of caregivers provide care for more than five years and 15 percent provide care for 10 or more years, according to the AARP report.
Family caregiving is rewarding, but you need to be prepared for the impact that care has on your life, not just financially but also emotionally, socially, and physically.
Download the 11 Most Common Caregiving Challenges eBook to learn more about the hidden costs of being a family caregiver, common family conflicts that can occur when caring for parents, and some of the unexpected challenges of caregiving.