The biggest decision about caregiving—“Do I do it myself or do I hire someone outside the family?”—is frequently based on an arithmetical calculation: what’s the difference between the cost of an outside caregiver and my take-home salary?
For many of us, this is an “ouch!” moment. People often find that their wages barely cover the expense of home care (or that they’re positively dwarfed by the cost of institutional care.) So, many of us quit our jobs and take on the infinitely more complex role of being caregivers without giving the question much more thought. Today, nearly 10 million adult children over the age of 50 care for their aging parents, triple the percentage that were doing so as recently as 15 years ago.
Trouble is, there are hidden costs to leaving the workforce that most people fail to consider, according to “Caregiving Costs to Working Caregivers,” a study produced by the MetLife Mature Market Institute in association with the National Alliance for Caregiving and The Center for Long Term Care Research and Policy at New York Medical College.
The study suggests caregivers who quit work can undermine the vital mission of planning and saving for their own retirement. This can set up a vicious cycle of dependency that will one day require their own children to devote precious resources to their care, according to Sandra Timmermann Ed.D., Executive Director of the MetLife Mature Market Institute. I spoke with Dr. Timmermann about the study and its implications for adult children whose parents may soon require caregiving:
Q: Your study has a subtitle, “Double Jeopardy for Baby Boomers Caring for their Parents.” That’s intriguing. Can you explain what it means?
A: We are well aware of the out-of-pocket costs for providing care. But prior to this study, no one really tracked the lost wages, lost pension and Social Security benefits and all the other costs. Double jeopardy reflects the hidden costs to caregivers for providing care.
Q: What are they giving up beyond wages?
A: Their nest egg is being slashed because they’re losing years of savings. And if they’re working in a company with a matched program like a 401(k), they’re losing those contributions. Dropping out of work may also impact their final Social Security payout. These costs are “hidden,” because so many people are living paycheck to paycheck and they may not look at the long range implications.
Q: That’s a lot to think about. Are there other hidden costs?
A: All of the caregivers we surveyed were over the age of fifty. So, for many of them it’s hard to get back in the workforce after a few years of doing home care. The calculation, “I’ll quit my job for a few years and then come back,” may not be realistic.
Q: When you add it all up, quitting work to be a caregiver can be pretty costly.
A: Perhaps so! It might really be better to hire somebody—even if it seems expensive—or find lower-cost community resources like adult day services, rather than quit your job.
Q: What are the policy implications of your report?
A: Ideally policy makers would consider the family caregiver as a deliverer of care as much as a hospital or assisted living facility, and then look at what could be done to support them. Tax credits would be one idea. Obviously that’s hard when most state and local governments are looking at so many cutbacks. At present, the government has established a program called the Class Act, which provides a very small benefit for long term care.
Q: And what are the implications for individuals?
A: It is a bit of a wake-up call. Caregivers need to look at what’s best for themselves, because they don’t want to be in the same situation as their parents 20 years down the road. There needs to be heightened awareness of individual finances and how they’re impacted by the decision to provide home care for a family member.
Steven Slon is the Editorial Director for The Saturday Evening Post. He writes a regular column about aging and caregiving for http://www.BeClose.com in which this article first appeared.