According to the National Caregivers Association, over 65 million Americans – approximately 29% of the U.S. population – provide care for chronically ill, disabled or aged family members or friends during any given year. Family caregivers provide an average of 20 hours of care per week. Over 66% of these caregivers are women, and 37% also have children or grandchildren under the age of 18 living with them. What, you might ask, does this have to do with financial planning?
The reality is that the value of the services provided by family caregivers in the U.S. is estimated to be upwards of $375 billion each year. Most of these caregivers receive little to no compensation for the services they provide. Providing caregiver services to friends and family can create a drain on family funds, as these caregivers must often leave their jobs or significantly reduce their hours. This, in turn, drains savings and delays retirements.
Action steps can be taken to protect the financial well-being of these valuable caregivers:
- Have a family plan in place for providing care. My recent blog on holding a family meeting is a good guide for starting this conversation.
- Coordinate family resources. This involves sharing responsibilities among family members (even those living at a distance) so that no one member is overburdened.
- Put financial resources in place to cover potential long term care expenses. This includes purchasing long-term care insurance or alternative self-funding strategies so that care can be paid for (this includes providing possible compensation for family caregivers).
One of the best ways to say “thank you” to current or future caregivers in your life is to plan. Contact your financial planner to provide assistance with family meetings, coordination of resources, or long-term care funding.
The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Center for Financial Planning, Inc., and not necessarily of RJFS or Raymond James.