Here's how much caring for aging family members can cost

By Alessandra Malito

Longevity is partly to blame for the extra pressure

A family caregiver's average uncompensated expenses could be more than $7,000, a new report revealed, and these costs often wind up cannibalizing the caregiver's own retirement savings.

Family caregiving can be for anyone: an older parent, an aunt or uncle, a partner or a loved one with a disability. A majority of people who take on this role are not just organizing medications, assisting around the house or driving relatives to doctors' appointments -- 90% of them are "financial caregivers," according to the TIAA Institute and the University of Pennsylvania School of Nursing.

That figure includes housing, healthcare and transportation, according to the study, and could be more if the patient has Alzheimer's. The expenses mean that some of the 53 million people who act as caregivers must withdraw from their savings or retirement accounts, take on debt, delay paying bills or pare down retirement contributions, the report found.

"They often have to make trade-offs, whether they spend money that is available for others' needs right now or take away from retirement," said Mary Naylor, professor of gerontology at the School of Nursing and one of the report's contributors.

See: You may become a family caregiver soon, and not even know it

The financial impact can be even worse for some relatives, however. Caregivers may take time out of the workforce, or shift to part-time, to manage their responsibilities for a loved one. The job can take a toll on their actual careers, pushing people to retire sooner than expected, the report found.

Longer life expectancies, although something many people strive for, is partly to blame for the pressure on family caregivers, who may be at an age where they're taking care of their older relatives, their younger children and balancing a career. And while living longer is a goal for many people, not everyone plans for it properly.

The average life expectancy has jumped 17 years since Social Security was created in 1935, the report stated. But more than half of U.S. adults do not use an accurate figure for their life expectancy, or how long they will live after retirement, according to TIAA Institute. Miscalculating that factor, such as estimating a shorter time horizon than what will become reality, could leave retirees with little to no savings toward the end of their lives.

Family and financial caregivers should be open and upfront with their loved ones, as well as any other relatives around, about the responsibilities and share those tasks with trusted resources if possible. Organizations like the National Council on Aging or a group dedicated to the illness or disability of the loved one could also point caregivers to resources, for physical and financial assistance. Although it isn't easy, said Surya Kolluri, head of TIAA Institute, talking to parents or anyone receiving the care is important. Having essential documents prepared, such as a power of attorney, is also key.

-Alessandra Malito

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11-01-23 1019ET

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