Americans are feeling increasing financial and lifestyle pressure due to caring for an elderly relative or friend, according to a Northwestern Mutual study.
“According to our data, Gen X and even Millennials are the heart of the sandwich generation and struggling with the competing pressures of caring for aging family members and their own children while building financial security and maintaining a lifestyle,” Kamilah Williams-Kemp, vice president of long-term care at Northwestern Mutual, said in a statement.
Northwestern Mutual recently released the results of its C.A.R.E. Study, which explores the multiple facets of caregiving and longevity risk.
The 2018 Northwestern Mutual C.A.R.E. (Costs, Accountabilities, Realities, Expectations) Study includes responses from 1,004 American adults from the general population, with an oversample of 233 American adults age 35 to 49 (for a total of 413) and an oversample of 709 experienced caregivers (for a total of 987).
Three in ten Americans identify as current or past caregivers and more than 1 in 5 (22%) expect to become caregivers in the future, according to the study. However, even though half of American caregivers (53%) say that the care event was planned, many remain unprepared for the financial obligations, which appear to be increasing year over year.
The survey finds that approximately seven in 10 caregivers provide financial support.
It also finds that more than a third (34%) of current caregivers spend between 21% and 100% of their monthly budget on caregiving-related expenses. Of those expenses, on average, $273 is spent on medicine/medical supplies and $159 on food, the survey finds.
To cover caregiving costs, two in three experienced caregivers said they reduced living expenses (significantly higher than the 51% who said so last year), according to the survey.
Yet, the survey also finds that people who believe they will provide care in the future are not taking steps to prepare. In fact, though nearly 6 in 10 (57%) future caregivers expect to incur personal costs as a function of providing care, 48% have not planned at all — a dramatic jump from 35% last year, the survey finds.
“While financial expectations for caregivers continue to grow, unfortunately planning is taking a backseat,” Williams-Kemp said in a statement. “In an environment of rising costs and fluctuating economic and health care realities, winging it isn’t an option. Being proactive before a long-term event happens can help ensure that you can still take care of your own needs while caring for someone else’s well-being.”
Not only are Americans not planning for when they become caregivers, they’re also not planning for their own long-term care events. According to the study, three-quarters of those surveyed said they have not planned for their own long-term care needs.
Among those who did take steps to prepare, 52% included provisions in their financial plan, 42% purchased a long-term care product, and 35% increased their savings.
Moreover, while Americans are most likely to look to their spouse/partner (47%) or children (26%) to be their caregivers, a majority (69%) have not shared those preferences with these family members or anyone else.
“To break this cycle, it’s imperative to have candid conversations with family members about your expectations and work together to develop a realistic strategy for your future care that will serve everyone’s best interests,” Williams-Kemp said.
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