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Family Caregivers Spend More Than $7,200 a Year on Out-of-Pocket Costs

AARP study finds family members feeling financial strain from contributing to loved ones' care

a woman sitting at a laptop and looking through bills looking stressed

Marko Geber/Getty Images

En español | The nation's 48 million unpaid family caregivers are not only dedicating their time and efforts to the well-being of their loved ones — most of them are spending their own money on caregiving expenses. According to a new AARP study, three-quarters of the family caregivers surveyed reported spending an average of $7,242 annually on out-of-pocket costs related to caregiving,

"AARP's new report shows the stark reality family caregivers face today,” says Nancy LeaMond, chief advocacy and engagement officer for AARP. “While financial challenges cross all segments of society, they hit hardest for Hispanic/Latino, African American and younger caregivers — as well as those caring for loved ones with dementia. Family caregivers are the backbone of America's long-term care system, and that backbone is breaking.”

The “Caregiving Out-of-Pocket Costs” study surveyed nearly 2,400 family caregivers of various ages and ethnicities from March 15 to April 25, 2021. Participating caregivers answered survey questions and tracked caregiving expenditures in 30 different categories for a period of one week.

infographic showing that seventy eight percent of caregivers incur routine out of pockets costs and the average is over seven thousand dollars per year also caregivers on average spend a quarter of their annual income on expenses

AARP Research

High medical, housing expenses

Contributing to a love one's housing expenses — paying for rent, mortgage, assisted living, home modifications and more — accounted for more than half of all costs incurred by caregivers surveyed. Medical expenses added up quickly, too. One-fifth of caregiver spending, more than $1,200 per year, went to direct payments for health care providers, hospitals, therapists, medical equipment and devices, in-home care, and adult day care.

The survey also found a correlation between increased work “strain” and higher out-of-pocket costs. Nearly 6 in 10 caregivers are currently working (59 percent) either full-time or part-time. Those who had a harder time juggling work and caregiving simultaneously and reported two or more work strains (like taking time off or working different hours) averaged $10,525 per year on caregiving expenses — almost double the amount that caregivers with no or one work-related issue.

Not surprisingly, the coronavirus made life more difficult for caregivers and care recipients. More than 4 in 10 caregivers report spending more time per week and more money on caregiving because of the pandemic.

'Astronomical’ costs

Jan Beard knows firsthand the financial and emotional costs that come with caregiving.

In 2015 her husband, Bob, then 61, suffered an ischemic stroke that left him with cognitive issues and paralyzed on his left side. Bob's condition forced him to retire from his job while Jan continued to work from home and provide full-time care.

Jan and Bob Beard

Courtesy Jan Beard

Jan and Bob Beard

"When Bob came home from therapy, he needed help with everything,” Jan explains. “That included me walking with him everywhere he went in the house. Bob needed help with going to the restroom, bathing, getting dressed — everything."

Jan originally researched facilities that could provide Bob the 24/7 care he required, but quickly realized that on one salary they couldn't afford the over $4,000 monthly fees.

"Bob was in the hospital for several months, so you can imagine the hospital bills were astronomical. Insurance did pay for part of it, but we still had lots of bills coming in the first couple of years,” she says, noting that they have had to dip into their retirement savings for therapy, wheelchairs, walkers and other specialized equipment. “There wasn't enough monthly income to pay for his care and for the things that he needed and be able to survive.”

LeaMond says this is a common scenario among those providing care. “Caregivers often sacrifice their careers and financial futures by reducing work hours, taking on debt and tapping into their own savings — ultimately jeopardizing their own retirement security,” she says.

The Beards recently made the decision to move into a basement apartment in the home of their adult son and daughter-in-law so Jan could get some much-needed caregiving assistance.

And while the physical stressors of caregiving are tough — the bathing, lifting and moving — Jan says the financial stress and fear of running out of money is always on her mind. “People do not realize what all is involved until you're in that place. It's frustrating and sad and overwhelming."

LeaMond says that feeling of being overwhelmed is why it is so critical that laws supporting family caregivers are enacted. The newly introduced Credit for Caring Act would provide a federal tax credit of up to $5,000 to eligible working caregivers.

"Family caregivers are struggling financially, spending over a quarter of their income to care for parents, spouses and other loved ones. Many are at the breaking point; some are drowning in debt,” she says. “They desperately need direct support to defray the cost of caring. The bipartisan Credit for Caring Act will help ease the financial stress of these hardworking Americans.”

Nancy Kerr joined AARP in 2016. She is the senior writer and editor of features content for the family caregiving and beauty and style sections of aarp.org. Before joining the organization, she was the editor of special projects for USA Today; a senior editor for the USA Weekend magazine; an assistant managing editor of digital content at The Washington Post and the director of women’s programming at America Online.

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