With 20 Million Americans Becoming Caregivers
Each Year, This Study Is the First of Its Kind to Explore the World
of Financial Caregivers.
A Merrill Lynch study, conducted in partnership with Age Wave,
finds that the 40 million1 family caregivers in the U.S. spend $190
billion per year on their adult care recipients. Despite the
financial, emotional and functional challenges in this life stage,
preserving the dignity of their loved one is their primary goal.
The vast majority of caregivers (91 percent) are grateful they
could be there to provide care, and 77 percent say they “would
gladly do so again.”
Family caregivers are America’s other social security, providing
the bulk of long-term care today. The aging of the baby boomers
will result in unprecedented numbers of people in America needing
care. As a caregiving crunch is upon us, “The Journey of
Caregiving: Honor, Responsibility and Financial Complexity” offers
an in-depth look at Americans’ financial and emotional journeys
during this life stage. This study marks the beginning of a new,
multiyear research series from Merrill Lynch and Age Wave that will
examine five distinct life stages: early adulthood, parenting,
caregiving, widowhood, and end of life.
As the first of the series, this study examines the
responsibilities, sacrifices and rewards of caregiving – a life
stage that nearly all Americans will participate in, as a
caregiver, care recipient or both. This study comprehensively
explores the topic of financial caregivers – a role largely
unexamined, yet held by 92 percent of caregivers. Financial
caregiving involves contributing to the costs of care and/or
coordinating or managing finances for a care recipient.
The study is based on a nationwide sample of more than 2,200
respondents, including 2,010 caregivers. Key findings about their
caregiving journey include:
- Much more than hands-on care.
Providing emotional support (98 percent), financial caregiving (92
percent), household support (92 percent) and care coordination (79
percent) far outweigh physical care (64 percent).
- Financial costs – with little
discussion of their ramifications. Seventy-five percent of
financial contributors and their care recipients have not discussed
the financial impacts of these contributions.
- Caregiving for a spouse vs. for a
parent. A spouse is 3.5 times more likely to be the sole
caregiver looking after a care recipient, and is more likely to
spend more out of pocket on care-related costs. Their caregiving
journey is also different in terms of the obligations and financial
interdependencies they hold with their loved one.
- Caregiving gender gap. Both for
cultural and biological reasons, women are more commonly caregivers
for spouses and parents, averaging six years of caregiving in their
lifetime versus four years for men.2 As a result, women are
disproportionately impacted by the challenges of caregiving,
including struggling to balance responsibilities and making career
sacrifices. And then, more find themselves alone and without
someone to care for them when needed.
- Responsibilities extend beyond the
care recipient’s life. Sixty-one percent of the time,
caregivers expect their role will end with the death of their loved
one. However, the complexities of financial, legal, and other
aspects of caregiving often continue for months, or even
years.
“As tens of millions of people take on caregiving
responsibilities each year, supporting those caring for our aging
population has become one of the most pressing financial issues of
our lifetime,” said Lorna Sabbia, head of Retirement and Personal
Wealth Solutions for Bank of America Merrill Lynch. “Greater
longevity is going to have a profound impact on the caregiving
landscape and calls for earlier, more comprehensive planning and
innovative solutions to address the health and long-term care needs
of our loved ones.”
Financial caregiving: Navigating complexity and
responsibilityThe study finds that 92 percent of caregivers are
also financial caregivers, and are contributing to and/or
coordinating finances for their loved one. In fact, after two years
of receiving care, 88 percent of care recipients are no longer
managing their finances independently.
Financial caregiving is often far more complex than simply
contributing to the recipient’s care. Financial caregivers are
responsible for a wide variety of tasks, including:
- Paying bills from their recipient’s account
(65 percent). - Monitoring bank accounts (53 percent). - Handling
insurance claims (47 percent). - Filing taxes (41 percent). -
Managing invested assets (21 percent).
- Health care rises as top
challenge. Respondents find that navigating health insurance
expenses is the top challenge of financial caregiving (57
percent).
- Uncharted territory. An
estimated 49 percent of financial caregivers don’t have the legal
authorization to perform their role.3
- Guidance and resources lacking.
Sixty-six percent of caregivers feel they could benefit from
financial advice.
Costs and compensations of caregivingWhile some aspects
of caregiving may feel like a burden, those surveyed also tell us
it is a blessing. Contrary to all we hear about the stress and
sacrifices of caregiving, for many caregivers, the role is also
often associated with a range of positive experiences and rewards.
Caregivers describe a complex, demanding yet often nourishing
journey – defined by honor, gratitude, fulfillment, purpose, and
strong family bonds.
Costs:
- Nearly three quarters of respondents
say they’ve made numerous sacrifices as a caregiver – whether
familial or professional.
- Fifty-three percent have made financial
sacrifices to compensate for caregiving expenses. Thirty percent of
caregivers say that they have had to cut back on expenses, and 21
percent have had to dip into personal savings.
- Two in five caregivers under the age of
64 have made sacrifices at work due to caregiving responsibilities,
including reducing their hours (17 percent) and leaving the
workforce (16 percent).
Compensations:
- Caregivers feel rewarded knowing they
are doing something good for someone they love – 61 percent say the
greatest benefit of providing care is the sense that they have
“done the right thing.”
- Seventy-seven percent say they would
gladly take on being a caregiver for a loved one again.
- Forty percent report a strengthened
bond between themselves and the care recipient, and 24 percent say
caregiving brought their family closer together.
- Eighty-six percent say watching their
loved one’s health struggle was a motivator that caused them to
place more value on taking care of their own health.
“Caregiving is one of today’s most complex life stages,
throughout which hard work, high stress and heavy obligations
intertwine with honor, meaning and resilience,” said Ken Dychtwald,
Ph.D., CEO and founder of Age Wave. “This experience becomes even
more emotionally complex and financially challenging when caring
for loved ones suffering from dementia or Alzheimer’s. Even with
that added burden, this study reveals that 65 percent say that
being a caregiver brought purpose and meaning to their life.”
The crucial role of employersEmployers can play an
integral role in supporting caregiving employees during this
demanding life stage. While 84 percent of employers say caregiving
will become an increasingly important issue in the next five years,
only 18 percent strongly agree that their workplace is currently
“caregiving-friendly”4 – underscoring the need for new approaches
and solutions across the workforce.
“Meaningful, well-designed employer benefits can make a crucial
difference in helping caregivers navigate the high stress of caring
for a loved one, and help them balance these responsibilities with
the rest of their working and financial lives. Just as child care
has been an issue in the past that led to revolutionizing HR
benefits, the aging of the population means we need to consider how
caregiving is becoming an increasingly important issue for
employers and employees,” said Kevin Crain, head of Workplace
Solutions for Bank of America Merrill Lynch. “These should include
resources and programs focused on addressing caregiving
complexities and employee networks that facilitate support from
experts and peers.”
According to Crain, “Bank of America Corporation is committed to
meeting the needs of caregivers in today’s transforming world.
Companywide initiatives dedicated to addressing the needs of our
country’s aging population and those of their caregivers include
combatting elder financial fraud, increased awareness of cognitive
decline and Alzheimer’s disease, and implementing caregiving best
practices through training and resources for its financial advisors
and corporate clients. The company supports our employees who are
caregivers through a variety of resources including access to
emergency back-up care for adults and children, professional elder
care assessments, elder care law services, and an internal Parents
and Caregivers employee network.”
1 AARP, 2015, Caregiving in the U.S.2 National Academies of
Sciences, Engineering, Medicine, 20163 AARP, 2015, report: Family
Financial Caregiving: Rewards, Stresses, and Responsibilities4
Northeast Business Group on Health & AARP, 2017. Caregiving in
the Workplace: Employer Benchmarking Survey
Age WaveAge Wave is the nation’s foremost thought leader on
population aging and its profound business, social, financial,
health care, workforce, and cultural implications. Under the
leadership of Founder/CEO Dr. Ken Dychtwald, Age Wave has developed
a unique understanding of new generations of maturing consumers and
workers and their expectations, attitudes, hopes, and fears
regarding their longer lives. Since its inception in 1986, the firm
has provided breakthrough research, compelling presentations,
award-winning communications, education and training systems, and
results-driven marketing and consulting initiatives to over half
the Fortune 500. For more information, please visit
www.agewave.com. (Age Wave is not affiliated with Bank of America
Corporation.)
Merrill Lynch Global Wealth ManagementMerrill Lynch Global
Wealth Management is a leading provider of comprehensive wealth
management and investment services for individuals and businesses
globally. With 14,954 financial advisors and $2.25 trillion in
client balances as of September 30, 2017, it is among the largest
businesses of its kind in the world. Merrill Lynch Global Wealth
Management specializes in goals-based wealth management, including
planning for retirement, education, legacy, and other life goals
through investment, cash and credit management. Within Merrill
Lynch Global Wealth Management, the Private Banking and Investment
Group focuses on the unique and personalized needs of wealthy
individuals, families and their businesses. These clients are
served by nearly 200 highly specialized private wealth advisor
teams, along with experts in areas such as investment management,
concentrated stock management and intergenerational wealth transfer
strategies. Merrill Lynch Global Wealth Management is part of Bank
of America Corporation. For more information, please visit
https://www.ml.com/financial-goals-and-priorities.html.
Bank of AmericaBank of America is one of the world’s leading
financial institutions, serving individual consumers, small and
middle-market businesses and large corporations with a full range
of banking, investing, asset management and other financial and
risk management products and services. The company provides
unmatched convenience in the United States, serving approximately
47 million consumer and small business relationships with
approximately 4,500 retail financial centers, approximately 16,000
ATMs, and award-winning digital banking with approximately 34
million active users, including approximately 24 million mobile
users. Bank of America is a global leader in wealth management,
corporate and investment banking and trading across a broad range
of asset classes, serving corporations, governments, institutions
and individuals around the world. Bank of America offers
industry-leading support to approximately 3 million small business
owners through a suite of innovative, easy-to-use online products
and services. The company serves clients through operations in all
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