We in the longevity industry generally have a “best-case” idea of who is managing the finances of older people: someone savvy enough to provide for his or her own immediate family while simultaneously having all the answers when it comes to asset management. Still, the numbers paint a different picture. Today’s financial caregiver is not a distant cousin who doubles as a CFO in his day job. It’s someone down in the dirt of daily caretaking—tired, stressed, and not necessarily educated about finances, let alone the financial caregiving process.
A recent study from Merrill Lynch, in partnership with AgeWave, showed more than 90 percent of senior caregivers today are the same ones managing their loved one’s finances—doing everything from paying bills to managing insurance claims and filing their annual taxes. What’s more, nearly 50 percent of those providing financial oversight to their loved ones don’t even have the legal authority to serve that role.
Indeed, when it comes to financial caregiving, the process is far messier than we realize. Many caregivers aren’t just helping write checks—they’re also covering the bills of loved ones who can’t otherwise afford them. They’re pooling money from many different sources, sharing the financial burden among many other family members, and/or struggling to manage their own finances at the same time. And, nearly 50 percent of those 40-59 are caring for their own children at the same time. They’re strapped. They’re stressed. And they’ve had to make a lot of sacrifices—financially and professionally—to weather the storm.
“The costs of caregiving can cause ripple effects throughout the caregiver’s life, with the potential to impact the caregiver’s work trajectory, retirement timing and nest egg,” says Cynthia Hutchins, Director of Financial Gerontology at Merrill Lynch. “In fact, many caregivers are willing to lend support at all costs—even if it risks putting their own financial future in jeopardy.”
The question remains: how can the longevity marketplace better serve these caregivers, and help them keep both their own finances—and their loved one’s finances—in order? The following are a few recommendations:
Aging is not easy. Caring for an aging family member is even less so. But the issue of money surrounding those issues makes life even more challenging. With our aging population continuing to grow, now is the time to support our financial caregivers—not deter them from undertaking the responsibility.