A 2020 study showed more than 1 in 5 Americans provided unpaid care in the previous year.1
An estimated 41.8 million U.S. adults are caregivers of recipients ages 50+.1
These numbers have increased over the last five years1 and will likely continue to grow with an aging Baby Boomer population.
Former first lady Rosalynn Carter famously said, “There are only four kinds of people in the world — those who have been caregivers, those who are caregivers, those who will be caregivers, and those who will need caregivers.”
The undeniable truth of the insight begs the question: Which one are you? It may come as a surprise to learn that many caregivers don’t even know they’re caregivers. They may think they’re simply helping someone they care about. Not sure if you’re one? If you’ve helped an adult family member or friend with personal needs, household chores, finances, medications, transportation, doctor appointments, other services, research, or even just kept them company in the past year, you are a caregiver.
If you’re not getting paid for your help, then you’re considered an informal caregiver. And you’re not alone. According to a 2020 caregiving report, nearly one in five Americans is providing unpaid care to an adult with health or functional needs.1 In contrast, paid care providers are considered formal caregivers. They can work in a home setting or in a facility such as assisted living or a nursing home. Informal and formal caregivers often provide long-term care.
What is long-term care?
Long-term care generally refers to services that meet someone’s health or personal care needs when they’re not able to take care of them on their own.
The same 2020 caregiving report showed that nearly all unpaid caregivers help with basic needs known as Instrumental Activities of Daily Living (IADLs) such as shopping for groceries, meal prep, housekeeping, laundry, finances, and medication management. Six in ten informal caregivers help with other needs classified as Activities of Daily Living (ADLs) such as transferring, eating, dressing, and bathing, and 58 percent help with medical tasks. Most caregivers of adults care for a relative — typically a parent or parent-in-law.1
Not surprisingly, long-term care needs vary by person and can change over time. However, someone turning 65 today has almost a 70% chance of needing some type of long-term care in the years ahead. And while roughly a third of them may never need long-term care support, 20% will need it for longer than five years.2
How to prepare for aging and long-term care
Whether caregiving is on the distant horizon or you’re already providing care, it’s important to discuss the matter with your loved one. Together, decide who would provide care if they needed help for an extended period and make plans for that care, such as instructions for handling financial matters, healthcare decisions, and living arrangements.
It’s also important to plan how additional care could be financed. Common options include long-term care insurance, a combination life insurance/long-term care product, an insurance policy’s accelerated death benefits, a health savings account (HSA), personal retirement savings, or Medicaid.
While the actual costs for care can vary by state and even zip code, the 2020 national monthly average is around $4,500 for in-home care, $4,300 for assisted living, and around $7,700 for a semi-private room in a nursing home.3
Preparing for caregiving
When family caregivers first take on the role, they may not be aware that it can exact a physical, emotional, and financial toll over time. Priorities can shift gradually and sometimes, unnoticeably, from taking care of their own lives to taking care of someone else’s. Some caregivers may even feel selfish if they put their needs above those of another. But ultimately, taking time to care for yourself ensures you can continue to care for others.
Caregiving and the physical toll it can take
Some caregiving activities are more physically demanding than others. Depending on the needs of your loved one, this may present some challenges that could require extra help.
According to WebMD, if your loved one is confined to the bed, unable to feed or bathe themselves, or if you’re employed full-time outside the home, are responsible for children or other family members, and lose sleep regularly to complete all their daily care needs, you likely need additional support.4
The emotional impact
While caregiving can be rewarding in many ways, caregiver stress is also common. This can be caused by the conflicting demands of your own needs and the needs of your care recipient. It may be due to a changing role — you may now be caring for someone who used to care for you, and it can be tough to see someone you care about decline. Caregiving in general can be stressful, which can leave some feeling angry, frustrated, exhausted, alone, or sad.5
To help manage caregiver stress, the Mayo Clinic recommends accepting help, setting realistic goals, getting connected to caregiving resources, joining a support group, maintaining social connections, and setting personal health goals. Sometimes, taking a break can be good for the caregiver and the one they’re caring for. Look for local respite care options like adult care centers and programs, short-term nursing homes, or in-home respite.5
The caregiver and financial expenses
Caring for a loved one can have long-term repercussions on a caregivers’ future financial security, particularly if they’re caregiving for an extended time.1 And nothing crystallizes the impact caregiving can have on finances better than seeing real numbers. According to a 2021 AARP study, 78% of caregivers incur routine out-of-pocket costs and three-quarters of the family caregivers surveyed reported spending an average of $7,242 annually on out-of-pocket costs related to caregiving.6
More than half of those costs went to housing expenses like rent, mortgage, assisted living, and home modifications, and more than $1,200 of it went toward medical expenses such as health care providers and medical equipment.6Having an awareness of these costs can provide a clearer picture of how caregiving could affect your financial future, and help you make decisions accordingly.
Key takeaways
While you’re caring for those you love, it’s important to know what to expect and to show yourself some love along the way. Remember that when your physical, emotional, and financial health are taken care of, you’ll have more to give to those around you.
The need for caregiving can arise for anyone at any time, and with the financial impacts it can have on retirement and more — it’s best to be prepared. See our resources below for insight and information that can help you form a plan to manage potential challenges ahead.
Things to Consider:
Know that it’s likely you’ll either be a caregiver or need a caregiver at some point in your life.
Take advantage of the many resources Transamerica provides to help protect your financial future while caring for your loved ones.
1 “Caregiving in the United States 2020,” National Alliance for Caregiving and AARP, May 2020
2“How Much Care Will You Need?” longtermcare.gov, February 2020
3 “Cost of Care Survey,” Genworth Financial, Inc., 2020
4 “Physical Demands of Caregiving: Time to Get Help?” WebMD, May 2021
5 “Caregiver Stress: Tips for Taking Care of Yourself,” Mayo Clinic, December 2020
6 “Family Caregivers Spend More Than $7,200 a Year on Out-of-Pocket Costs,” AARP, June 2021
Transamerica Resources, Inc. is an Aegon company and is affiliated with various companies which include, but are not limited to, insurance companies and broker dealers. Transamerica Resources, Inc. does not offer insurance products or securities. The information provided is for educational purposes only and should not be construed as insurance, securities, ERISA, tax, investment, legal, medical or financial advice or guidance. Please consult your personal independent professionals for answers to your specific questions.
