A lot of young couples face the daunting prospect of how to afford care for their young children. In many instances, child care is so expensive that it makes more financial sense for one parent to stay home. This decision has a profound impact on the couple’s finances and the stay-at-home parent’s future job prospects.
What we hear about far less often is the individual faced with filling the role of caretaker for an elderly parent — or parents.
According to the Caregiver Action Network, over 29% of the U.S. population cares for chronically ill, disabled, or aged family members. Women make up a disproportionate percentage of these caregivers, forcing them to make difficult financial decisions as they are pulled between family loyalty and their own financial needs.
Advances in medicine have helped citizens of the United States enjoy some of the longest lifespans in the world. Currently, the average American lives to age 78. Women live even longer, with an average lifespan of 81 years. This means that many of us get to enjoy the presence of our parents long into our adulthood.
Unfortunately, even as Americans live longer, the cost of care continues to grow. If your Mom needs help cooking and cleaning her home or assistance with Activities of Daily Living (like dressing and bathing), she may face a monthly bill of $3,994 for homemaker services. Even a few hours at an adult daycare facility each day will set your mother back $1,517 a month. A nursing home is even more expensive, with the average national cost for a semi-private room ringing up at $7,148 a month, according to the 2017 Genworth estimates!
Many seniors can’t rely on pensions as they did in the past, and women in particular often receive paltry Social Security checks. That means many older seniors are moving in with their adult children. This is especially true for the estimated five million Americans currently living with Alzheimer’s!
Adult children now find themselves forced into a caretaker role even as they try to progress in their careers and care for their own children at home.
The Financial Consequences of Caregiving
The Caregiver Action Network estimates that caregivers provide $375 billion worth of free care in the United States each year. The average caregiver is “a 49-year-old woman caring for her widowed 69-year-old mother… She is married and employed.” At this age, a woman is in her prime earning years. Care needs may affect her ability to put in the hours to keep up with her younger co-workers or male co-workers who aren’t facing care responsibilities.
Many women, faced with the prospect of covering huge nursing home bills, decide to leave the workforce altogether to become full-time caretakers to aging parents. This means the woman loses out on her years of highest income. Not only will this affect her current quality of life, but it will dramatically lower her ability to save for retirement. Because Social Security is calculated based on an individual’s highest-earning years, this could result in huge losses in future Social Security checks as well.
A woman who drops out of the workforce, even for a few years to care for an ill parent or relative, could find it extremely difficult to get re-hired. Her skills may have degraded, or she may find that many companies are reluctant to hire an older worker approaching retirement.
This is not to say that leaving the workforce to care for your parent is a bad choice. Only that this is an important topic that hasn’t received nearly enough coverage. Such a decision is one that each family must make for themselves by carefully weighing all the options and determining what is right for your circumstances.
One way you can potentially avoid this scenario altogether is to encourage your parents to meet with an estate planning or elder law attorney who can help them prepare for future care needs. This may include the purchase of long-term care insurance, which can partially or fully cover nursing home or home healthcare expenses. An elder law attorney can also help your parents position their estate so that they can eventually qualify for Medicaid when nursing home care is needed.
It’s time that we start discussing the plight of adult children faced with a parent who needs care. Tell us your story on our Facebook page.