Women and Long-Term Care: Caregiving Risks that Every Woman Should Know

Mary Quist-Newins, MBA, MSFS, CFP®, ChFC®, CLU®

 

Women and LTC - Title image

November is National Long-Term Care Awareness Month and it’s important for all of us — especially women — to take note. I think it’s safe to say, “everybody knows somebody” who is, or will be affected by long-term care. An astonishing 70% of Americans over 65 will need long-term care ¹ and one in five households already give care.² Since women represent most caregivers and nursing home residents, their consequences can be especially harsh.

Most of us are drastically unprepared for the seismic impacts of giving or needing care. I mean, who likes to think or talk about becoming enfeebled? Absolutely nobody. Yet, when we overlook common and significant risks, we leave ourselves vulnerable.

Proactively facing long-term care is key to reducing its negative impact. Addressing this risk should be part of every woman’s financial plan. By doing so, we can gain increased economic security, sense of purpose, clarity, and peace of mind.

Women and Caregiving

Women render most formal (paid) and informal (unpaid) care in the U.S. and their services are often greatly undervalued. Unspoken expectations leave many feeling they have no choice. More than half (53%) said they had no alternative to taking on caregiving responsibilities according to the 2020 AARP Report on Caregiving in the U.S. ³

Almost two in three unpaid caregivers are female who spend an average of 23.7 hours per week giving care. According to the National Caregiver Alliance, women also spend 50% more time on caregiving duties than men. ⁵

It’s also important to acknowledge the incredibly low wages for professional caregivers, nearly nine in ten of whom are female. ⁶ According to Indeed.com the average compensation for a formal caregiver in the U.S. is just $14.99/hour, or $31,179 per year. (No wonder there is a crisis-level shortage of these professionals!) Along with an aging population, this worker shortage will exacerbate the burdens on unpaid caregivers.

 

Caregiving Exacts a Heavy Toll

While the high cost of facility care is generally well known (averaging about $100,000 per year nationwide), the costs and consequences associated with providing care at home are not. Consider these stark facts:

Women and LTC Blog - Heavy Toll

 

  • Family caregivers often pay for medications, supplies, and handicap accessible accommodations. Research by the National Caregiver Alliance reveals that many resort to funding sources that jeopardize their own finances, like taking on more debt, using up cash reserves, leaving bills unpaid and borrowing from family/friends.⁷
  • The lifelong financial impact can be even more striking since most caregivers are still employed. Three in four work more than 30 hours per week, and 60% work full time.⁸ Since the average caregiver is in her late 40s/early 50s, she is often at the peak-earning period of her career. ⁹
  • Employed caregivers pass up job promotions, take leaves of absence, decrease working hours, and sometimes quit jobs or retire early. Forgoing employment opportunities means reduced income, fewer dollars available for savings, lower employer contributions to retirement plans, and decreased Social Security benefits.
  • The National Caregiving Alliance estimates that in 2015, the total financial impact of caregiving in terms of lost wages, employer contributions, and Social Security ¹⁰ benefits was $324,044. As a result, women who become caregivers are nearly three times more likely to end up in poverty and five times more likely to depend exclusively on Social Security. For women of color, the financial penalties are even more severe.
  • Beyond the financial drain are the physical and emotional costs. Nearly eight in ten individuals giving care report suffering from either a short or long-term physical condition, or both. Upwards of one in five cite emotional, mental, or memory challenges. These issues become particularly acute when the recipient is older. ¹¹

Without good planning, retirement can just be an abstract concept. In the press of the business, it can be hard to separate oneself from the tangible “here and now” to plan for an intangible retirement concept.

While these competing demands are understandable, they are fundamentally dangerous if they get in the way of a well-thought-out and prudent plan. After all, most business owners take on far more risks than those employed by others. This means taking action to plan for retirement is critical and especially important for women due to higher risks mentioned above.

How to Prepare

Women and LTC Blog - How to Prepare

As the saying goes, “Once prepared, twice armed.” The best time to address the possibility of any risk is before it happens. Here’s how to prepare for the prospect of caregiving:

1. Talk About It

Despite the high probabilities and costs associated with long-term care, most people never talk about it. A recent independent survey conducted by HCG Secure found that 57% of respondents between ages 40 and 64 had not discussed long-term care needs or preferences with their families. ¹²

Ask yourself, “What is the likelihood I’ll need to be a caregiver?” In my financial planning practices, I found most people intuitively know the answer to this question. Often, it’s the wife or daughter(s) in the family. If that’s the case, then it’s critical to understand and plan for its impact on you, your family, your finances, and your retirement. (See Mind the Gap and Discover Resources below.)

Ask your parents and/or partner about their choices and the plans they have made if they should need care. This can be a revealing and difficult conversation. For help in knowing what to say, I recommend Susan Piver’s book, “The Hard Questions for Adult Children to Ask Their Aging Parents.”

2. Mind the Gap

Whether you do your financial planning on your own or with a professional, it’s essential that you anticipate risks and gaps. By “minding the gap,” I mean quantifying the financial impact of long-term care. To get a sense of how much you would need to accumulate in assets to cover the cost of care, whether for yourself or a family member, check out the Moneyweave® Academy Long-Term Care Required Savings Calculator.

If you have a financial advisor helping you plan for retirement and that person hasn’t asked you if you might become a caregiver someday, that is a red flag. Retirement planning is more than just accumulating assets. It’s also about addressing risks. When advisors don’t address major challenges that can undermine your financial security, it begs serious questions about competency.

3. Discover Resources

Being a caregiver can be a lonely, overwhelming, and yet sometimes rewarding journey. Here are resources for help and more information:

CaringBridge. Start your site for fundraising, getting help with grocery delivery, meals, and transportation.

National Alliance for Caregiving. A nonprofit coalition of national organizations that support family caregivers. Help for caregivers can be found through their resources page, which lists over 35 different organizations that provide support.

Caregiver Resources & Long-Term Care – U.S. Department of HHS. Offers resources for information, assistance, planning, veteran, and end-of-life care services.

Paying for Care – National Institute on Aging. Information on what government assistance may pay for, private insurances (health, life, annuities, long-term care policies), reverse mortgage considerations, and more.

Eldercare Locator – Administration on Aging - U.S. Administration for Community Living. A nationwide service that connects older Americans and their caregivers with trustworthy local support services.

4. Advocate

There is an urgent need for a movement to improve how we address caregiving as a nation. While this blog has largely focused on women and elder care, everybody knows somebody — dependent children and/or disabled family members — that give or need care. While most of these responsibilities are assumed by women, they affect us all. We can and must do more.

To become an advocate and part of the solution, check out this white paper, The Price We Pay: Why We Need to Redefine Care in America by the Ford Foundation and the range of resources/opportunities it offers.

Giving care to another person can a beautiful gift and joyous experience. It can also bring financial, emotional, and physical hardship. As we have seen, it can be particularly challenging for women. I hope this blog has raised awareness of some risks that caregivers face, along with helpful resources to call upon no matter where you are in your journey.

Copyright©, Mary Quist-Newins, November 2022, All Rights Reserved

About the author, Mary Quist-Newins, MBA, MSFS, CFP®, CLU®, ChFC®, Founder, Executive Director and Chair, Moneyweave® Academy

Sources:

  1.  “How Much Care Will You Need?,” Department of Health and Human Services, LongTermCare.gov, Retrieved 10.16.22 https://acl.gov/ltc/basic-needs/how-much-care-will-you-need
  2. “Caregiving in the U.S, 2020 Research Report,” AARP, National Alliance for Caregiving, Retrieved 10.19.22, https://www.aarp.org/content/dam/aarp/ppi/2020/05/full-report-caregiving-in-the-united-states.doi.10.26419-2Fppi.00103.001.pdf
  3. Caregiving in the U.S., 2020 Report, AARP Family Caregiving, National Alliance for Caregiving, Retrieved 10.18.22 https://www.aarp.org/content/dam/aarp/ppi/2020/05/full-report-caregiving-in-the-united-states.doi.10.26419-2Fppi.00103.001.pdf
  4. Caregiving in the U.S., 2020 Report, AARP Family Caregiving, National Alliance for Caregiving, Retrieved 10.18.22 https://www.aarp.org/content/dam/aarp/ppi/2020/05/full-report-caregiving-in-the-united-states.doi.10.26419-2Fppi.00103.001.pdf
  5. Selected Caregiver Fact Statistics (2001 Fact Sheet), National Center on Caregiving at Family Caregiver Alliance, Phyllis Mutscheler, PhD, Retrieved 10.16.22, https://www.caregiver.org/resource/women-and-caregiving-facts-and-figures/
  6. The Female Face of Family Caregiving, (November 2018 Fact Sheet), National Partnership for Women & Families, Retrieved 11.7.22  https://www.nationalpartnership.org/our-work/resources/economic-justice/female-face-family-caregiving.pdf
  7. Caregiving in the U.S., 2020 Report, AARP Family Caregiving, National Alliance for Caregiving, Copyright © 2020, retrieved 10.18.22 https://www.aarp.org/content/dam/aarp/ppi/2020/05/full-report-caregiving-in-the-united-states.doi.10.26419-2Fppi.00103.001.pdf
  8. Caregiving in the U.S., 2020 Report, AARP Family Caregiving, National Alliance for Caregiving, 2020, retrieved 10.18.22 https://www.aarp.org/content/dam/aarp/ppi/2020/05/full-report-caregiving-in-the-united-states.doi.10.26419-2Fppi.00103.001.pdf
  9. Women and Caregiving: Facts and Figures, 2015, National Center on Caregiving at Family Caregiver Alliance, Phyllis Mutscheler,  PhD, Copyright © 1996 – 2022, retrieved 10.18.2022 https://www.caregiver.org/resource/women-and-caregiving-facts-and-figures/
  10. Women and Caregiving: Facts and Figures, 2015, National Center on Caregiving at Family Caregiver Alliance, Phyllis Mutscheler,  PhD, retrieved 10.18.2022 https://www.caregiver.org/resource/women-and-caregiving-facts-and-figures/
  11. Caregiving in the U.S., 2020 Report, AARP Family Caregiving, National Alliance for Caregiving, retrieved 10.18.22 https://www.aarp.org/content/dam/aarp/ppi/2020/05/full-report-caregiving-in-the-united-states.doi.10.26419-2Fppi.00103.001.pdf
  12. Most Americans Are Unprepared for Long-Term Care Costs, New Research Shows, 8.2,2022, Forbes, Deb Gordon, Retrieved 11.7.22m https://www.forbes.com/sites/debgordon/2022/08/02/most-americans-are-unprepared-for-long-term-care-costs-new-research-shows/?sh=15f212da4209
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