We frequently discuss the emotional costs associated with family caregiving, but the devastating financial costs often go unnoticed. When people cut back on their hours to take care of family members, or are forced to quit their jobs altogether, the costs add up fast. According to a study conducted by the AARP, the “total estimated economic value of uncompensated care provided by family caregivers in 2013 surpassed total Medicaid spending ($449 billion) and nearly equaled the annual sales ($469 billion) of the four largest U.S. tech companies combined.” But that’s just the beginning.
A recent MetLife study of more than 1,100 adults with at least one living parent estimated that the “total aggregate loss for the nation’s 9.7 million caregivers is $3 trillion.” That figure includes the reductions in wages, pension benefits, Social Security contributions and retirement savings that come when people leave work early to care for aging parents. And that’s still not all. A new AARP study says that on top of the losses they’re already experiencing, these caregivers are spending their own money while providing care. The study “estimates that family caregivers spend an average of $6,954 on out-of-pocket costs related to caregiving, nearly 20 percent of their annual income.”
Female Caregivers Suffer Most
Because an estimated 66% of caregivers are women, their lifetime earnings are hit especially hard. The Family Caregiver Alliance assembled some sobering statistics that illustrate this point:
- 33% of working women decreased work hours
29% passed up a job promotion, training or assignment
22% took a leave of absence
20% switched from full-time to part-time employment
16% quit their jobs
13% retired early
On an individual basis, the financial costs are staggering. The same report states that:
The negative impact on a caregivers retirement fund is approximately $40,000 more for women than it is for men.
- Caregiving reduces paid work hours for middle aged women by about 41 percent.
- In total, the cost impact on the individual female caregiver in terms of lost wages and Social Security benefits equals $324,044.
It quickly becomes clear that the choice to provide care for a family member comes at a high financial. So what’s the solution?
Get Outside Help
Feelings of love and responsibility motivate many family caregivers. While that’s certainly admirable, those feelings often prevent caregivers from seeking outside help. And while it may seem like the cost of providing care yourself is less than seeking help from professional caregivers, when you include added costs like lost wages and retirement income, professional care suddenly becomes much less expensive.
If you ever face this situation, carefully consider your options. Start by fully exploring your loved one’s benefits as they may help cover caregiving costs. Once that’s done, research local in-home care providers. You may find they’re much less expensive than you think and will allow you to continue advancing your career and personal earnings. Because in the end, taking care of yourself will allow you to take better care of the ones you love.