Caregivers in the spotlight

This week, when many Americans gather for what may be their first Thanksgiving during the pandemic — or what some are calling “VAXgiving” — it will be a great opportunity for long overdue hugs and kisses, and an in-person assessments of how loved ones are doing.

In proclaiming November as National Family Caregivers Month, President Biden said: “Every day, millions of Americans provide essential care and medical assistance to their loved ones. This has been especially trying throughout the Covid-19 pandemic, during which Americans of all ages have made substantial sacrifices to keep family members safe and healthy.”

At my own family gathering this year, we will be thankful for those who are present and for those who are only present in our hearts. During the past year, we have discovered how life can change in instant and how caregiving roles can be thrust upon us.

Just ask my niece, mother of a 22-year-old college senior who was the sole survivor of a car crash earlier this year that killed three of his friends. Brandon was lucky to survive, but the star baseball player lost his foot in the process.

His parents went from empty nesters to full-time caregivers, asked to make critical medical decisions, sweating through numerous surgeries and scheduling grueling physical therapy sessions while they negotiated with insurance companies and lawyers. Thank goodness for their empathetic and competent financial adviser, who continues to guide them through the nightmare.

My older brother Jay expected to take his place at the head of the table this year in his usual role of family patriarch following shoulder replacement surgery two weeks ago. Although the orthopedic surgery was deemed a success, his aging brain has yet to clear the anesthesia, resulting in cognitive impairment and an uncertain future. Suddenly, his wife of more than 60 years has become a caregiver.

Today, more than 53 million people in the U.S. provide unpaid care to a relative or friend, according to the National Alliance for Caregiving and AARP. More than 60% of those caregivers are women.

In addition, the rapidly expanding elderly population has put a new focus on caregiving — both in terms of hands-on care and financial management. More than 49 million Americans are 65 or older, and by 2034, America will reach a new milestone: older adults will total 77 million, outnumbering children under age 18 for the first time in history.

As financial advisers face the dual pressures of fee compression and competition from automated trading platforms, many are looking for ways to differentiate their practices and demonstrate their value to new and existing clients. Including financial caregiving support may be part of the answer.

Caregiving can have serious financial consequences, especially for adults nearing retirement. More than 60% of caregivers report making adjustments to work schedules to accommodate caregiving responsibilities, and nearly half of caregivers experience one financial impact, such as using personal savings, leaving bills unpaid or having to borrow money.

A 2011 study from the MetLife Mature Market Institute showed that women over 50 who leave the workforce to care for a parent lose, on average, $324,004 in wages, Social Security benefits and private pensions over their lifetimes as a result of their caregiving responsibilities.

The Women’s Institute for a Secure Retirement (WISER) has issued a new free financial guide for caregivers that advisers may want to share with their clients. The guide looks at the financial challenges facing today’s family caregivers and provides information, tips and resources to help caregivers keep their own finances on track while caring for someone else. Included in the guide is a budget worksheet that factors in many of the out-of-pocket costs of care.

Another free resource, caregiver.com, offers a caregiver’s checklist that includes knowing where to find essential financial documents such as insurance policies, pension records, bank accounts and critical passwords for all digital accounts.

[Questions about Social Security rules? Find the answers in Mary Beth Franklin’s ebook at Maximizing Social Security Retirement Benefits]