Free Long-Term Care Costs $3 Trillion
Here are some important questions for those who are in their 50s and 60s to consider if their plans for long-term care that they will someday need involves one or more of their adult children, a spouse, or a sibling.
- Who will be the care giver?
- Will your spouse be able to be the care giver?
- Do your children live near you?
- What are the consequences your children would face if they had to take care of you today?
- Are all of your siblings on good terms with each other?
- Can your relatives afford to provide free care for you?
A recent study by MetLife says that total estimated aggregate lost wages, pension, and Social Security benefits of these care givers is nearly $3 trillion and approximately 10 million adult children over the age of 50 are care givers for their aging parents.
Owning long-term-care insurance can prepare you and your family for the costs, both financial and personal, of extended care.
This is a serious problem because family care givers are losing income at a time when they need to be planning and saving for their own retirement.
The study, Baby Boomers Caring for Their Parents, was produced by the MetLife Mature Market Institute in partnership with the National Alliance for Caregiving and the Center for Long Term Care Research and Policy at New York Medical College.
The study analyzes data from the the National Health and Retirement Study (HRS) and uses estimates to determine the extent to which older adult children provide care to their parents, the roles gender and work play in that care giving, and the potential cost to the care giver in lost wages and future retirement income as a result of their support.
- The percentage of adult children providing personal care and/or financial assistance to a parent has more than tripled over the past 15 years. Currently, a quarter of adult children, mainly Baby Boom *ers, provide these types of care to a parent.
- The total estimated aggregate lost wages, pension, and Social Security benefits of these care givers of parents is nearly $3 trillion.
- For women, the total individual amount of lost wages due to leaving the labor force early because of caregiving responsibilities equals $142,693. The estimated impact of caregiving on lost Social Security benefits policy is $131,351.
A cautious estimated impact on pensions is approximately $50,000. The cost in total impact of caregiving on the individual female care giver in terms of lost wages and Social Security benefits equals $324,044.
- For men, the total individual amount of lost wages due to leaving the labor force early because of caregiving responsibilities equals $89,107. The estimated impact of caregiving on lost Social Security benefits is $144,609.
An additional estimate of the impact on pensions at $50,000, the total impact equals $283,716 for men, or $303,880 for the average male or female care giver 50+ who cares for a parent.
- Working and non-working adult children are almost equally as likely to provide care to parents in need.
- Overall, caregiving sons and daughters provide comparable care in many respects, but daughters are more likely to provide basic care and sons are more likely to provide financial assistance.
- Adult children 50+ who work and provide care to a parent are more likely to have fair or poor health than those who do not provide care to their parents.
The long-term financial impact of care giving on care-givers, especially those who must curtail their working careers, will jeopardize their future financial security. There is also evidence that care givers experience considerable health issues as a result of their focus on caring for others.