www.sperosfinancial.com Long-Term Care Tip of the Day!

Long-Term Care, Steep Costs Even When It's 'Free'

Whether clients choose unpaid care or rely on it out of necessity, it's important to understand the hefty costs of such care. 

EARLY RETIREMENT

Family care-giving often leads to the caregiver quitting a job. According to the AARP "Valuing" study, around 22% of retirees left the workforce earlier than planned in order to care for an ill spouse or family member.

Around 83% of people in their prime working years (ages 51 to 54) may need to take care of their own parents or their parents-in-law, according to research cited in the AARP study. For those nearing retirement (60 to 69 years), more than 45% face the risk of needing to care for a parent.

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www.sperosfinancial.com Long-Term Care Tip of the Day!

Long-Term Care, Steep Costs Even When It's 'Free'

Whether clients choose unpaid care or rely on it out of necessity, it's important to understand the hefty costs of such care. 

HURDLES AT WORK

In 2014, around 60% of caregivers were employed either full time or part time and faced competing demands from their workplace, according to the AARP study. Among those caregivers, 40% were 50 years old and above.

Of those surveyed for another 2015 AARP report, "Care-giving in the U.S.," 49% made adjustments with working hours, 15% took a leave of absence, 7% received warnings about performance or attendance, and 5% had to turn down promotion offers as a result of care-giving.

"Workplace challenges often arise when children become primary caregivers of their parents," says Birkofer. "These challenges can include having to take time off in the middle of the day, using personal time to take the parent to doctors' appointments, and using vacation time to visit their parents in other cities or locations."

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www.sperosfinancial.com Long-Term Care Tip of the Day!

Long-Term Care,  Steep Costs Even When It's 'Free'

Whether clients choose unpaid care or rely on it out of necessity, it's important to understand the hefty costs of such care. 

THE VALUE OF INFORMAL CARE 

In 2013, the estimated economic value of unpaid family care-giving was $470 billion. Caregivers offered 37 billion hours of care for their spouses, partners and other loved ones. The total value is based on 40 million caregivers providing approximately 18 hours of care every week at the rate of $12.51 per hour.

This value -- which surpassed total Medicaid spending ($449 billion) -- has risen steadily, up from $450 billion in 2009, $375 billion in 2007 and $350 billion in 2006, according to the AARP study. 

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www.sperosfinancial.com Long-Term Care Tip of the Day!

Long-Term Care: Families Face Steep Costs Even When It's 'Free'

Skilled care -- whether at home, in an institutional setting or by a professional caregiver -- is one of the most significant financial demands clients face in retirement, says advisor Joseph Birkofer with Legacy Asset Management, in Houston. "The average person has a vague idea of long-term care expenses and a lot of hope that their assets will cover them," he says. "They never sit down and actually identify the specific financial demands of their retirement days."

While professional LTC is expensive, "free" care provided by family members can be financially burdensome as well. Many people who end up relying on unpaid care do so out of necessity, says Jesse Slome, executive director of the American Association for Long-Term Care Insurance. "A significant number of people wait too long and the cost gets too high," he says.

But family members who end up acting as caregivers can incur losses of $303,880 on average for a typical caregiver, according to an earlier Metlife study cited in AARP's 2015 "Valuing the Invaluable" report. This takes into account the loss of wages and Social Security and pension benefit losses due to leaving the workforce early.

Whether clients choose unpaid care or rely on it out of necessity, it's important to understand the hefty costs of such care. 

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Speros Financial 

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