In the U.S., about 10 million people over 50 years of age care for at least one aging parent. That’s 1 in 4 adult children, mostly Baby Boomers. For these caregivers, it’s a case of “double jeopardy,” according to the latest MetLife Study of Caregiving Costs to Working Caregivers.
Caregiving translates into double jeopardy for older caregivers because they take a double financial hit: just as they’re entering sobering (for some, proverbially last-minute) savings mode for retirement, they are compelled to lose wages and, ultimately, Social Security benefits which are calculated based on the last years of earnings. The chart shows that women caregivers are more severely impacted than men to the tune of $277,044 on average, which comprises two financial hits: directly, in lost wages forgone in reduced hours working and labor force exits; and, lost Social Security. If private pensions are included at an average of $50K, the total impact on caregiving women would be $324,044.
While men and women are equally likely to provide care, MetLife finds that women tend to provide basic care and sons more likely to provide financial assistance. (Basic care in the survey is defined as personal activities such as dressing, feeding and bathing — the Activities of Daily Living). 66% of caregivers are women and 34% men. 57% of caregivers work outside of the home and 43% do not.
This challenge will exacerbate as Boomers age and their parents live with growing burdens of chronic disease aging into the frail elderly cohort. The proportion of adult children providing personal care and/or financial assistance to parent(s) has more than tripled in the past 15 years.
MetLife analyzed data from the 2008 panel of the National Health and Retirement Study conducted by the University of Michigan along with MetLife’s forecasts on the extent to which adult children take care of their parents.
Health Populi’s Hot Points: The implications for adults who provide care to aging parents are financial and physical. It’s clear from these data that caregiving by adult children results in financial loss in terms of both income and Social Security savings. In addition, monies put toward private pension plans [e.g., 401(k) plans] are also negatively impacted as wages and the worker’s disposable income declines.
On the physical front, adult caregivers are likely to postpone their own care while focusing on the needs of their loved ones, MetLife suggests. The irony is that working women and men who provide care to their parents are in worse health than adult children who do not provide care to aging parents, illustrated in the chart.