Gains in longevity have increased the likelihood and length of time someone might need to care for a family member or require care themselves. Yet caregiving has not been a focus for traditional financial planning.
Summary
Although the emotional and physical toll on family caregivers is well recognized, the financial impact has received less attention. This paper examines the financial dimensions of caregiving and recommends ways to address issues and concerns that arise at various life stages. The authors also explore the concept of “longevity literacy” as a framework for setting financial caregiving expectations, and for addressing longstanding issues of gender equity in retirement saving and readiness.
Key insights
- Uncompensated caregiving expenses related to housing, healthcare, transportation and other needs typically add up to more than $7,000 per year.
- One in four caregivers has less than $1,000 in savings and investments; for non-caregivers, the ratio is about one in seven.
- Sixty percent of caregivers are women, and women on average have 30% less retirement income than men.
- Financial advisors need to take a more holistic view when helping clients; financial wellness requires more than simply building a nest egg for retirement.
- Employers can support working caregivers by providing flextime, paid family leave, geriatric care services, emergency backup care and other benefits caregivers need.
