Andy Duplay was trying to save his family. The Ohio technical consultant’s in-laws — Bob and Jean, both 75 — were suffering mental and physical breakdowns after a death in the family, and they needed help. The family decided to move Jean into a nursing home and Bob into assisted living, but the costs quickly became overwhelming.
“Bills were in the $10,000-per-month range, and Jean was becoming a zombie in the nursing home,” Duplay wrote in a blog post detailing the harrowing experience. “At the rate money was being spent, they would be broke within a year.”
Finally, Duplay and his wife worked out a solution: They bought a bigger house and had Bob and Jean move in with them. It worked out better than the nursing home, but it was still expensive — and Duplay felt he could have used more help.
“The things I wish most for are some sort of counseling to help older people and their caregiving families make the transition smoother,” he said, and “financial aid to help defray the high cost of keeping your parents at home … We are saving Medicare money by keeping them at home, but spending our retirement savings. How about some help for us?”
Duplay is far from alone. Increasingly, many Americans are taking it upon themselves to care for aging family members — and it’s draining their savings for their own retirement.
“These adult kids end up stepping in and, in time, that caregiver snowball happens,” said Annalee Kruger, the co-founder of Plan4Life, a company in Bonita Springs, Florida, that educates financial planners on this issue. “It starts out feeling manageable, but then the more care that their parents need, and the more emergency trips that are happening back and forth, the more it’s costing them.”
It’s a widespread and growing challenge. In the United States, about 48 million adults provide unpaid care for an adult relative or friend, according to a study by the senior citizens group AARP. On average, these Americans spend 26% of their income on care-related expenses — including medical costs, home modifications, household expenses and rent or mortgage payments. People aged 75 and older had average out-of-pocket costs for healthcare, not including health insurance, prescription medication, medical supplies and doctor’s visits, of more than $7,100 in 2021, according to the Bureau of Labor Statistics.
More than half of these caregivers — 53% — have had to make changes to their employment, often resulting in lost income. Nearly one in five told AARP they had to work fewer hours, 20% took unpaid time off, 6% quit their job and another 6% retired early — all of which can put a dent in one’s nest egg.
“If you have to take early retirement because you feel compelled to take care of Mom or Dad or your in-laws, if there’s no income coming in, you’re not going to be able to contribute as much as you would want to for your portfolio,” Kruger said. “So it has a drastic financial effect.”
But there’s also an even more direct harm: 18% said caregiving forced them to save less for retirement, and 12% actually pulled from their long-term savings to make ends meet.
“Those are dollars that are not going into investments,” said Rita Choula, the director of caregiving at the AARP Public Policy Institute. “At a time when you probably [should be] ramping up the amount of money you’re putting aside for retirement, you’re not able to do that anymore.”
Much of this is due to a positive trend: Americans are living longer than they used to. In 1900, the life expectancy of the average U.S. citizen was 47 years, according to Harvard Medical School. By 1950, that age had risen to 68, and in 2021 it was up to 76. (In 2019 it had been even higher — 79 — but the COVID-19 pandemic brought it back down.) As a result, it’s not just retirees who are living longer — it’s also their parents and other older relatives.
In one sense, caring for aging family members is part of a broader pattern: More and more Americans are working part-time during their retirement. Twenty-six percent of U.S. adults aged 50 and older are working freelance or contract jobs, according to a recent study by AARP, the national advocacy group for senior citizens. Among workers aged 45 and older, that number shot up from 16% in 2018 to 26% in 2023.
The problem with family caregiving is that unlike these other jobs, it’s unpaid. And what that really means, in many cases, is that it’s paid for with lost income or forfeited savings. AARP found that the average caregiver loses $7,242 per year. For Generation Z and millennials, those losses were even higher — $7,462, on average — and for Generation X it was higher still, at $8,502.
“I think when we talk about retirement planning — especially as it relates to family caregiving — we tend to think about it for those that are in their later 50s, 60s and up,” Choula said. “In reality, we see more Gen Zers, millennials and Gen Xers … in really prime earning years, having to pay out of pocket, having to make career decisions that could impact the amount of money that they’re able to put into their retirement.”
Financial advisors can help clients avoid this trap — if they know about it. To that end, Kruger and her fellow co-founder at Plan4Life, Bob Mauterstock, have devised a 10-week class called the “Elder Planning Specialist Program.” The course teaches advisors how to spot which of their clients are becoming family caregivers, understand the financial risks, facilitate family meetings and begin planning realistically for those expenses.
“We know that most adult kids end up thrust into the role of family caregiving without ever having any kind of family meeting about about these types of things — like, ‘What is our actual plan when dad’s dementia progresses and mom can’t take care of him safely anymore?'” Kruger said. “That’s how the Elder Planning Specialist Program was born.”
On Feb. 23, the Financial Planning Association announced that it was partnering with Plan4Life to provide this class to its 22,000 members. The first FPA course will begin on March 27.
“Aging not only impacts those who are getting older, but also has an impact on those families and caregivers who want to ensure their loved ones are properly taken care of,” said FPA’s current president, James Lee. “Annalee and Bob are well-known experts in this space who have developed a program we are now delighted to offer through FPA for our members.”
Some advisors have already learned these skills on their own. Danielle Miura, the founder of Spark Financials in Ripon, California, focuses specifically on advising caregivers. Among other tips, she urges other wealth managers to make sure the caregivers are taking care of themselves.
“Caregiving can throw anyone’s self-care routine into a loop,” Miura said. “Having a partner in their journey they can rely on to nudge them when they aren’t taking care of themselves is key to keeping them healthy.”
It’s also important, she said, for clients to feel comfortable reaching out to others for help — and advisors can remind them that that’s OK.
“Having the support of friends and family can make your caregiving experience more manageable,” she said. “For example, if only you contribute to your loved one’s expenses, create a caregiving agreement or ask your family members to chip in.”
Above all, both advisors and educators said the most important step is to start the conversation — even if it brings up difficult subjects.
“Most families are very ill-equipped for such things as aging and caregiving,” Kruger said. “Financial planners are in a unique position to say, ‘Hey, let’s start normalizing these uncomfortable, awkward conversations and let’s put a plan together.'”