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Bob Powell: When it comes to long-term care services, not all are paid according to financial advisor Ken Waltzer. In a recent article in Retirement Daily, Waltzer noted that family, friends and neighbors often provide unpaid care. In fact, the national care planning counsel estimates that informal care givers represent about 20% of the population. A typical caregiver is a daughter, in her forties with a full time job who provides about 18 hours per week of unpaid longterm care. The need for longterm care also varies by gender. While only about 40% of men will use paid longterm care, more than half of women can expect to need it. Women are also more than twice as likely to need paid longterm care for more than five years. This is not because men are healthier than women. Quite the opposite. Elderly men are more likely to be married than older women because men die sooner. As a result, 65% of informal caregivers are women.

Long-term care can be expensive. But that doesn't mean all long-term care services cost money. In fact, family, friends, and neighbors often provide unpaid care, according to a recent article in Retirement Daily by Kenneth Waltzer.

In the article, Waltzer notes that informal caregivers - many of whom are daughters in their 40s with a full-time job and provide 18 hours per week of unpaid long-term care -- represent about 20% of the population. What's more, some 20 million Americans become a caregiver each year, according to a 2017 Merrill Lynch study, conducted in partnership with Age Wave.

To be fair, it's called "unpaid" but even unpaid long-term care comes with a cost. For instance, 40 million family and friend caregivers in the U.S. collectively spend $190 billion per year on their adult care recipients, and provide 37 billion hours of care, according to the Merrill Lynch/Age Wave study. What's more, that study revealed that 92% are financial caregivers, or contribute to the costs of care and/or manage finances for a care recipient.

The Sacrifices of Unpaid Caregivers

Not surprisingly, nearly three quarters of respondents (71%) say they've made numerous sacrifices as a caregiver - whether familial, financial or professional, according to the Merrill Lynch/Age Wave survey. Consider:

  • More than half (53%) have made financial sacrifices to compensate for caregiving expenses
  • 30% of caregivers say that they have had to cut back on expenses
  • 24% have had trouble paying their bills
  • 21% have had to dip into personal savings

As for career sacrifices, the survey found that four in 10 caregivers under the age of 64 have made sacrifices at work due to caregiving responsibilities, including reducing their hours (17%), leaving the workforce (16%) and lowering Social Security benefits (14%).

And while there are financial costs to informal caregivers not much is known about the ramifications, according to the Merrill Lynch/Age Wave survey. Consider:

  • 52% could not say what they had spent on caregiving-related expenses to date.
  • 45% couldn't even estimate how much they spent in the last month.
  • 75% of financial contributors have not discussed the financial impacts of these contributions with their care recipient.

The Many Roles of Informal "Financial Coordinators"

And lastly, it's worth noting that many informal caregivers become "financial coordinators," according to Merrill Lynch. They organize and oversee various aspects of a care recipients' finances and they are responsible for a wide variety of tasks, including:

  • Paying bills from their recipient's account (65%)
  • Monitoring bank accounts (53%)
  • Handling insurance claims (47%)
  • Filing taxes (41%)
  • Managing invested assets (21%)

The top challenge for informal caregivers? Healthcare. Nearly six in 10 of those responding to Merrill's survey find that navigating health insurance expenses to be the top challenge of financial coordination.

One resource for caregivers and would-be caregivers is The National Care Planning Council.

More Retirement Advice on Long-Term Care

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