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Caregivers who Handle a Loved One’s Finances Face Higher Stress

An article just published on the aging-related website NextAvenue should be a must-read for anyone who is caring for an aging loved one or family member. It’s called “Caregiving’s Taboo Subject: Coordinating the Finances.” The story, written by NextAvenue’s Money and Work Editor Richard Eisenberg, reveals some surprising findings about how many caregivers are responsible – either in part or entirely – for the financial affairs of those they care for, and at the same time how few of them ever talk with their loved one about their role as money manager. This silence about money coupled with a general lack of good information for caregivers on how they should handle their responsibilities is a big part of the reason why being a caregiver is so stressful, and often so expensive.

The article cites a “groundbreaking” study (Eisenberg’s term) just published by Merrill Lynch and AgeWave, an aging-related consulting firm. It’s called The Journey of Caregiving, and according to the NextAvenue article it documents (among other things) the extent to which caregivers become enmeshed in managing their loved ones’ money. In putting the study together, researchers interviewed more than 2,000 caregivers, excluding professional caregivers and those looking after adult children, so they could get a better snapshot of the roughly 40 million Americans who are informally caring for older loved ones. Of these, says Merrill Lynch, more than 9 out of 10 could be classified as “financial caregivers,” which means they either coordinate and manage their loved one’s financial affairs or they provide direct financial support – or both. (The report says about two-thirds of all adult caregivers directly contribute money toward their loved one’s care.)

What’s particularly surprising, however, is the fact that 75 percent of caregivers say they have never discussed their financial responsibilities with the person they’re caring for. That’s why people involved with the study call finances “a taboo subject” and say they were “floored” by the magnitude of the issue. “Many of America’s financial caregivers (especially the financial coordinators) are overwhelmed, if not perplexed, about how to perform these duties,” writes NextAvenue’s Eisenberg. The report authors called the caregiving journey “emotionally, physically and financially taxing.”  Within two years of assuming their caregiving duties, and faced with escalating financial responsibilities, the majority of caregivers told Merrill Lynch  that their loved ones needed “full assistance with their finances,” inferring that the caregiver could no longer handle the burden.

According to the Merrill Lynch AgeWave study, many caregivers quickly discover that they don’t know where to go for expert advice on the decisions they’re being asked to make on their loved one’s behalf. “This idea of being a financial coordinator is a little bit complicated,” said the CEO of AgeWave. “People are doing it honorably and with respect, but without much guidance. They’re kind of winging it.” This level of complexity rises dramatically when the one receiving the care has dementia, which is the case for more than 20 percent of caregivers. According to NextAvenue, “A 2015 AARP caregiving study found that caregivers for people with Alzheimer’s or dementia spend, on average, 54 percent more than the average caregiver.” The article adds that financial caregivers “collectively spend an estimated $190 billion per year on their care recipients for out-of-pocket, care-related expenses.”

But that’s not the whole financial picture. “Sometimes,” writes Eisenberg, “the indirect financial costs — lost hourly wages, reduced Social Security benefits and lost 401(k) contributions — are higher than the direct ones.” The Merrill Lynch report cites one example of a 54 year old woman who switched to part-time work to take care of her mother. This woman’s direct out-of-pocket costs came to $26,000, but her indirect caregiving costs totaled $31,000. “Her total caregiving costs during the six years assisting her mother: $384,000.” Still, surprisingly, more than half of all caregivers said “they have no idea how much they’ve spent on caregiving-related expenses,” and nearly half couldn’t estimate the amount they spent on them in the last month.

Here at AgingOptions, having walked the caregiving journey ourselves and shared the experience with many hundreds of others, we think the recommendations that conclude the NextAvenue article make sense. They are:

  • “Talk openly with your family about this topic.” In our experience this is best handled at a family conference where an objective professional can facilitate the discussion. Parents can say who they want caring for them and how they want financial matters handled. Obviously the sooner this conference takes place, the better.
  • “Find out where your parents’ medical, legal and financial documents are.” At least one-third of respondents in the Merrill Lynch survey said “a top challenge was locating passwords and account information.”
  • “Get professional help.” The article suggests consulting an estate planning attorney as well as a financial adviser because “It’s easier for a third party to help start the conversation.” If you do not have a trusted financial adviser for your family needs, contact us at AgingOptions and we will gladly refer you.

After all these bleak statistics, we were very glad to read the report at the end if the NextAvenue article that revealed this encouraging fact: more than 90 percent of caregivers said they are “grateful for the opportunity to help someone they care about,” and more than three-fourths would “gladly” do it again. Even with the challenges, caring for a loved one is an honorable activity that can give great meaning to our lives. Just ask anyone who has done it!

Our passion here at AgingOptions is to help our clients, radio listeners and seminar guests live out their retirement years with joy, purpose and security, allowing them to protect their assets as they age and avoid becoming a burden to those they love. If you’re ready to learn how your finances, medical needs, legal protection, housing preferences and family communication can all work together in retirement, then you’re ready to discover the power of a LifePlan from AgingOptions. We invite you join Rajiv Nagaich at a LifePlanning Seminar soon – a free opportunity for you to discover the impact of retirement planning as it was meant to be. Click here for details and online registration, or contact us by phone for assistance. A LifePlanning Seminar from AgingOptions will help you see retirement in a whole new light! We’ll look forward to seeing you soon.

(originally reported at



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