Caregiving Continues to Be a Challenge for Retirement Security

Caregiving Continues to Be a Challenge for Retirement Security

Retirees today face a host of financial challenges that previous generations didn’t. The exit of guaranteed pensions from the private sector, coupled with increasing lifespans, has left many older Americans scrambling to make ends meet.

Not only that, there is often the need to start providing care for elderly parents or other relatives who have become unable to perform one or more of the activities of daily living (ADLs).

Paying to have this type of support professionally can be a financial burden for those who don’t have any insurance to cover them. But providing the care yourself can be equally burdensome in other respects.

Nationwide Retirement Institute conducted a comprehensive survey on caregiving and how it affects the lives of the caregivers. The survey researchers looked at those who were in the middle of their careers. These folks are commonly referred to Gen Xers or the sandwich generation.

The survey was designed to find out how they fared in retirement when also dealing with the challenge of caregiving for loved ones.

What Did Their Responsibilities Look Like?

Nationwide researchers noted that some of the respondents anticipate caregiving in their future responsibilities. Meanwhile, others take it on out of necessity.

The poll surveyed 1,462 adults. Those surveyed were at least 50 years old and had a minimum of $50,000 in investable assets.

These adults were already retired or were planning to retire within the next 10 years. The survey also included a separate sample of 516 people ages 50 and up who were currently or had been caregivers.

On average, the caregivers spent 54 hours per week giving assistance to loved ones. Almost two-thirds of caregivers were women. On average, women spent 46 hours per week providing caregiving assistance while men spent 35 hours on average.

This could have implications for women in terms of not having enough savings for retirement and having to work longer to make up for income shortfalls. Kristi Rodriguez, VP of thought leadership at Nationwide, noted this in a post-survey interview.

How Much Did Caregivers Spend Each Year?

According to the survey, caregivers spent an average of $4,012 per year on caregiving expenses out of pocket. Over half of them (62%) spent money out of their own pocket on caregiving expenses. Meanwhile, 21% said they fear that caregiving expenses would keep them from ever retiring.

Among the overall group of those surveyed, 83% agreed with the statement that “I’m afraid that caregiving expenses will keep me from ever retiring.”

What Were Their Expectations for Their Own Future?

How does caregiving for loved ones affect people’s own expectations and desires for the future? In the survey, over half (54%) said they would rather die than live in a nursing home. Yet 50% worry about becoming a burden to their family as they age.

Nearly three-quarters (74%) of the adults would prefer to receive long-term care, if needed, in their own homes. But only 53% actually count on being able to achieve that.

One in 20 (5%) said they would prefer to live in another family member’s home while receiving long-term care. Reportedly most of the caregiving help for older adults came from “family members, friends, or other unpaid caregivers.”

Independent or Depend on Others for Long-Term Care?

Almost 6 in 10 (58%) reported they would like to be able to rely on a family member for long-term care help. However, they wouldn’t expect assistance (72%) or rely on family (69%) unless they were able to compensate them for their help.

Just 41% of older-aged adults have confidence in their ability to pay for long-term care. However, over a third haven’t discussed long-term care costs with their financial advisor, significant other, or family member.

This should serve as a wake-up call for children of elderly parents who haven’t discussed this issue with them yet. When they start to need this type of care isn’t the time to find out that they have no money to pay for these services.

Why Hasn’t There Been Discussion of Long-Term Care?

Part of this may be due to future expectations.

One-third of adults don’t expect to live long enough to use long-term care insurance. Meanwhile, 46% believe a long-term care insurance policy is “most often used in a nursing home.”

Those expectations and perceptions can influence buyer decisions. Nevertheless, according to Nationwide, 52% of long-term care policy claims are used to cover home healthcare by paid professionals.

How Can You Plan for Long-Term Care with Confidence?

Be sure to check up on how you can be ready for the possibility of caregiving for loved ones in your future — and whether you might need any long-term care assistance yourself.

There are a variety of helpful clue-ins you can use to indicate what your future needs might entail. You can look to your family history, your personal medical history, and conversations with your doctor for some insights.

Where Can You Find Help Planning for This?

A qualified financial professional is an excellent resource for finding ways to pay for long-term care.

With their help, you can build out financial strategies for long-term care support, whether it is for you or someone else. There are financial professionals who specialize in this segment of the market.

They can tell you what types of coverage are the most beneficial and affordable. They can also help you to determine which assets you might need to liquidate to cover this type of expense — and how to do it in the most tax-efficient manner possible.

Another alternative for those who are caring for someone else is to charge them for your services, albeit at a much lower rate than a professional caregiver would charge.

This can provide you with at least a measure of income for all of your time and effort without draining all of the assets of the recipient. Find out how much professional caregiving services would cost and then consider charging them half that much in return for the help that you can give.

This can allow you to arrive at a happy medium that is beneficial for both of you.

Planning for Tomorrow Starts Today

Caregiving when you are at or near retirement can be a heavy burden, and not just financially. Talk with your older relatives about their long-term care needs and how they plan on receiving them in the future while you still have some time to prepare for this.

Having a plan in place when the time comes can make all the difference. Consult your financial advisor about different options and how you can plan for long-term care with confidence.

What if you are looking for a financial professional to guide you? No sweat.

Many financial professionals are available at to assist you. Use our “Find a Financial Professional” section to connect with someone directly. Should you need a personal referral, call us at 877.476.9723.

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