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Surprising Out-of-Pocket Costs for Caregivers

Typical family caregiver spends thousands of dollars from personal funds a year to help loved ones

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En español | As an unpaid family caregiver, you can expect to spend nearly 20 percent of your personal income on out-of-pocket costs related to helping your loved one, according to an AARP study.

And if you're trying to do this work long distance, your costs are considerably higher, according to the report, Family Caregiving and Out-of-Pocket Costs.

"The strain can be enormous and may put [caregivers'] own financial and retirement security at risk,” says Nancy LeaMond, AARP's chief advocacy and engagement officer.

Researchers surveyed nearly 2,000 family caregivers representing a variety of races and ethnicities in July and August 2016 and asked them to keep a diary of their expenditures. The study found that family caregivers spent an average of nearly $7,000 a year of their own money — more than $7,400 in 2019 dollars.

That spiked to nearly $12,000 — $12,700 when adjusted for inflation — for caregivers who lived an hour or more from the care recipient. Costs generally were slightly higher if those receiving the care were 50 or older.

A breakdown of the costs involved

More than 3 out of 4 caregivers incurred some or all of the following out-of-pocket costs (the figures are adjusted for inflation to 2019; they don't add up to $7,400 because of rounding):

• Household expenses. More than $3,000, 41 percent, was spent on items such as making mortgage payments, modifying a home to accommodate difficulty getting around and installing remote health and safety monitoring devices.

Personal costs

What caregivers say they've cut back on because of the costs of providing care to a loved one:

• Trips or vacations, 45%
• Eating out, 45%
• Personal doctor visits, 19%
• Groceries, 18%
• Household supplies, 14%
• Personal medicine, 13%
• Children's education, 5%

Source: Family Caregiving and Out-of-Pocket Costs, AARP

• Medical needs. More than $1,800, 25 percent, was spent on co-payments for doctors, hospitals and prescriptions; equipment such as wheelchairs, oxygen concentrators or hearing aids to help make daily life easier; and travel to get the recipient of care to a doctor's office or clinic.

• Personal care expenses. More than $1,000, 14 percent, was spent on items such as clothing, incontinence supplies, shampoo, soap and even pet care for the person receiving the care.

• Education, travel and legal fees. Almost $900, 12 percent, was spent for expenses such as traveling to provide the care, retrofitting vehicles to accommodate wheelchairs, consultations with lawyers or educational expenses if, for example, the caregiver received any training.

• Paid help. More than $600, 8 percent, was spent for assistance and respite care, including adult day care, counseling, geriatric care managers and hired companions.

Hispanic/Latino caregivers often had to spend thousands of dollars more of their own money to get the job done than did caregivers of other ethnicities, the AARP study showed.

Professional home care costs more

Family caregivers often spend this money because it's less costly than getting professional home health care.

In 2018, Genworth, which sells long-term care insurance, estimated the average monthly costs for homemaker services — light housekeeping, meal preparation and running errands — at more than $4,000. The costs for a home health aide, someone with medical training who can assist with bathing or other more personal needs, were about $200 more a month, adding up to more than $50,000 a year.

Approximately 1 in 7 adults in the United States — about 40 million people — provide some type of unpaid care to another adult, according to a 2018 Pew Research Center analysis of U.S. Bureau of Labor Statistics data.

On average, adult caregivers spend almost 80 minutes a day providing unpaid assistance that includes bathing, bill paying, dressing, eating, home maintenance, medical care and transportation to appointments, Pew researchers found.

About 1 in 5 spend less than 20 minutes a day to provide the necessary care. But more than 1 in 10 need three hours or more daily, the equivalent of a part-time job.

Effect on work, spending, saving

About 3 in 5 caregivers — almost 24 million people — have a paying job in addition to their caregiving responsibilities, according to another 2016 AARP analysis.

More than half of family caregivers have to take time off from their main job, reduce hours at work or quit their jobs altogether to accommodate their responsibilities, AARP researchers found. This can mean diminished chances for promotions, less job security, fewer employment benefits, reduced money set aside for their own retirements and lower Social Security benefits for themselves when the time comes.

More than a third cut back on personal spending to get the extra money they need to pay for a loved one's needs.

Three in 10 have dipped into their personal savings, 1 in 6 have reduced the money they set aside for retirement, 1 in 7 have spent less on their own health care, more than 1 in 10 have gone into their retirement savings and another 1 in 10 have taken out a loan.

The good news: In the past two years, states have passed more than 200 laws that support family caregivers and help provide flexibility in their paying jobs, for example, by expanding options for leave to care for ailing loved ones.

The federal Recognize, Assist, Include, Support, and Engage (RAISE) Family Caregivers Act, signed into law in 2018, requires the U.S. government to develop a strategy to help family caregivers. That work is happening now.

More Financial Information for Caregivers

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