Financial Planning

The Real Cost of Caregiving Involves Personal Sacrifice and Hidden Tolls

By  Danielle Miura

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According to the Bureau of Labor Statistics, there are 40.4 million unpaid family caregivers over 65 in the United States. In a recent study by AARP, unpaid care provided by family caregivers is estimated to be worth over $470 billion per year. 

Many caregivers are hesitant to move a loved one into their home due to feelings of guilt, concern about quality of care, or long-term care expenses. A caregiver’s commitment to a loved one is admirable, but it comes at a cost. If caregivers don’t plan, they may find caring for their loved ones at home less affordable than in a senior living facility. 

The real cost of caregiving goes well beyond monetary expenses. Here are eight hidden costs of caregiving that should be considered and planned for carefully.

1. Lost Wages

Caregiving can consume most of their time. Caregiving tasks may start small but are likely to increase over time. As the time needed increases, family caregivers often cut back on their work hours to devote themselves to taking care of their loved ones.  

Taking your loved one to doctor’s appointments or leaving work early to tend to medical emergencies can reduce your pay and shrink the number of available paid time off, vacation, and sick leave hours. According to the National Alliance for Caregiving and AARP, family caregivers spend an average of 24.4 hours a week providing care. It’s not surprising that the time it takes to be a caregiver often means sacrificing their career. 

2. Missed Promotions

If an employer knows that an employee is a family caregiver, they might be weary of promoting them. While your employer may be understanding and flexible with work hours, they may also realize that the employee has a lot on their plate. According to Transamerica Institute, forty percent of caregivers feel that their relationship with their employer is strained; eight percent stated they were not given a promotion due to their caregiving duties.

According to the National Alliance for Caregiving and AARP, five percent of caregivers stated they turned down a promotion due to their caregiving responsibilities. Your employer may resent your time away from work to care for your loved one, decreasing your chances of getting a promotion. 

3. Increased Health Care Costs

Family caregivers often experience increased physical and emotional strains due to caregiving, according to AARP. These effects of caregiving can lead to long-term chronic health concerns, translating to increased health care costs for family caregivers, especially those who have lost their health insurance due to leaving their job. 

4. Loss of Savings

Not only do caregivers have to cut back on their spending to meet the needs of their loved ones, one-third of caregivers stated that they have had to dip into their savings to cover caregiving-related costs, according to AARP. 

A family caregiver can incur expenses that add up quickly. These extra expenses can include:

  • Groceries and household supplies
  • Medical bills
  • Higher utility bills
  • Clothing and personal care items
  • Transportation costs
  • Senior center or adult daycare fees

Extra caregiving expenses may cause caregivers to dip into their savings. Twenty-two percent of caregivers stated that they used all their short-term savings, while twenty-two percent went through all of their long-term savings.

5. Changing Retirement Plans

Caregiving can negatively impact your future retirement. At an age where most people are trying to save for retirement, eighteen percent of caregivers are taking a loan, hardship withdrawal, or early withdrawal from their retirement accounts. 

Your caregiving responsibilities may force you to leave the workforce early. According to a survey by Transamerica, eight percent of the respondents retired early, and seven percent quit their job due to caregiving.  

6. Home Modifications

Senior home safety and accessibility are essential when inviting your loved one into your home. While home modifications may be expensive, preventing injuries and reducing falls can save you thousands in medical bills. 

Home modifications can include:  

  • Grab bars and no-slip pads
  • Wheelchair ramps
  • Home inspections
  • Alert systems and GPS trackers 

7. Emotional Costs 

Emotional costs are one of the most underestimated costs of being a caregiver. Stress, sadness, anger, and exhaustion are everyday occurrences for caregivers. According to the American Psychological Association, adults who care for multiple generations at once are more likely to suffer from anxiety and depression. Caregiving doesn’t only have a personal impact, it can also lead to expenses such as therapy sessions or hiring a mediator to settle family disputes. 

8. Social Health Costs

Since hours spent caregiving can’t be at work, they also can’t be spent socializing. Caregivers find that their world revolves around caring for their loved ones, therefore they have less time for their hobbies and social relationships. 

According to Frontiers in Psychology, they found that caregivers experience significant amounts of loneliness. Caregivers reported feeling restricted about how they spent their time and had to do significant planning to set aside time for social outings. 

Five Ways to Reduce Family Caregiver Costs

With the right tools, you can minimize your caregiving costs. Consider these five ways to reduce the hidden costs when caring for an aging loved one. 

  1. Be prepared: Preparation is the best way to offset the costs of family caregiving. By doing your research ahead of time, you will know what you are up against and increase your chances of providing affordable care to your loved one. Having conversations about caregiving costs ahead of time can prevent family disputes. Establishing a power of attorney for your loved one can also simplify future transitions if their needs increase. 
  1. Use technology: Nothing can take the place of in-person help and companionship, but technology can reduce the number of hours a family caregiver needs to be present. For example, home alert systems and monitors can help prevent injuries and costly hospital visits. Smartphones and tablets can help seniors stay preoccupied, connect with friends and family, and communicate with doctors via telehealth appointments. 
  1. Take advantage of tax credits and deductions: Based on your caregiving costs and loved one’s tax circumstances, you may qualify for some tax credits and deductions. A tax advisor can help determine if you can utilize these tax-saving techniques.
  1. Look into family caregiver pay: Under some conditions, it might be possible to get paid to be a family caregiver. Some states have passed laws supporting family caregivers with payment programs and paid leave from work. 
  1. Reach out to friends and family: Even though asking for help can be difficult, having the support of friends and family can make your caregiving experience more manageable. If you are the only one contributing to your loved one’s expenses, create a caregiving agreement or ask your family members to chip in. 

The Hidden Benefits of Family Caregiving

Although the cost of family caregiving will make an impact, the hidden benefits can easily overlook the long and tiring days. Despite the hidden costs of caregiving, 95 percent of caregivers say their experience is worthwhile, according to the National Opinion Research Center. Based on the report, caregivers found benefits in giving back to someone who has cared for them and the satisfaction of knowing that their loved one is getting the best care. 

Here are some of the most beautiful moments of being a family caregiver: 

  • Tender moments like helping them wash their hair or watching TV until you fall asleep is love in its purest form. You will remember the feeling of this connection for years to come.  
  • It is a gift to understand what makes someone uncomfortable, what hurts, and what makes them smile. You will set an example of how to show empathy and love. 
  • Learning about your loved one can teach you about their life. You may hear stories you never knew if you hadn’t been their caregiver. 
  • During your caregiver journey, you will learn new things about yourself that you didn’t think you could do before, like administering medication or finding the right words to comfort someone. You may realize that your ability to love and care for someone is greater than you thought. 

This article reflects the insights and opinions of its author and is not a recommendation or endorsement of their views or services.

Danielle Miura

About the Author

Danielle Miura

Danielle is a Fee-Only, Advice-Only Certified Financial Planner and Sandwich Generation Specialist. She is the founder of Spark Financials, a life and financial planning firm specializing in helping Sandwich Generation families. As a CERTIFIED FINANCIAL PLANNER™ professional, she specializes in comprehensive financial plan development, financial education, and financial research.

Disclaimer: To make Wealthtender free for our readers, we earn money from advertisers, including financial professionals and firms that pay to be featured. This creates a natural conflict of interest when we favor their promotion over others. Wealthtender is not a client of these financial services providers. Learn how we operate with integrity to earn your trust.