Research Indicates Financial Hardships of Caregiving May Put Future of Millennials in Doubt
SPRINGFIELD, MASS., JULY 16, 2015-- Like the rest of the world, the United States’ population is aging, according the U.S. Census, a shift that is setting up a current and growing trend: more and more younger people in the U.S. are becoming caregivers--parents of children with autism or other disabilities, military families and caregivers to veterans injured in the recent wars in Iraq Afghanistan, and siblings of young adults and adults with disabilities.
As more younger people take on the enormous role of caregiver, recent research sponsored by Massachusetts Mutual Life Insurance Company (MassMutual), The Easter Seals Many Faces of Caregiving Study, found that many are unprepared for the financial impact of this role, jeopardizing their own future.
“We often refer to the Baby Boomers as the sandwich generation, but Gen Y and X could be called the ‘club sandwich’ generation,” said Joanne Gruszkos, director of MassMutual’s SpecialCareSM Program. “These younger adults are not only trying to get their own lives off to a sound start, perhaps starting a family, while often caring for siblings with disabilities or in some cases, spouses who are injured or disabled veterans, and anticipating caring for an aging parent in the future.”
The Growing Trend
The MassMutual-sponsored study documents the growing trend toward younger caretakers in the U.S. Additionally, these caregivers are investing significant amounts of their own finances toward the care of their loved ones. Whether or not financial support is provided, caregiving requires time away from work that could impact a caregiver’s ability to earn a living.
Respondents indicated that one-third is currently providing unpaid care to a loved one, and forty-seven percent say it is very likely they will be providing care, support or coordination to a friend, partner or family member in the next few years. Of those who indicated they currently are caring for a loved one, 80 percent said they have been providing that care for a year or more. Forty-four percent of caregivers also indicated that they provide financial support.
The commitment to provide care for a family member or loved can result in a closer relationship between the caregiver and person receiving care. Two-thirds describe this closer relationship as a result of the caregiving relationship.
But this same commitment also often impacts the caregiver negatively, perhaps even putting at risk the financial security of the persons providing the care in both the short- and long-term, sometimes profoundly. Study respondents who identified themselves as being caregivers indicated that they have less time for themselves (47 percent), an increased stress/anxiety level (36 percent) and poor sleep (35 percent). Close to 20 percent of caregivers indicated a financial impact and half say their future financial/retirement plans are being impacted.
Preparing for the Role
It is important to note that this unintended impact of caregiving can be avoided with some foresight and advanced planning. The first step is to have an honest conversation with your family members about their own health care wishes and the plans that they may have in place to carry them out. Will they be able to fund their long-term care, or will they need to count on you for care? The future caregiver should then temper these with their own future plans. Having this conversation before being called upon to provide care for a family member is ideal, allowing for a maximum amount of time to put plans into place.
Despite this advice, 61 percent of survey respondents indicated that they have not talked to peers, siblings, and other family members about the need to have conversations with their parents or grandparents. More than half have not talked to parents or grandparents about their future financial plans. Forty-one percent have not planned their own financial future.
Help Is Available
First, have the conversation: Thirty-two percent of caregivers already have spoken with parents or grandparents about financial or retirement plans, but two-thirds of non-caregivers have not. Why wait?
The next step is to get the financial information needed to plan: Sixty percent say information about and understanding of financial planning would be helpful as they make their plans for the future.
Here are some tips for getting started:
- A team approach – Seek trusted advisors who have the special needs experience and are willing to guide you through the important financial decisions that affect your entire family.
- A caregiver and a letter of intent – Identify the person who will care for your loved one and draft a letter of intent that will serve as a guide for that person to provide care, support and other assistance after you are gone.
- Long-term expenses – Plan ahead for expenses such as housing, education, work opportunities and daily transportation when determining your loved one’s lifetime financial needs.
- Availability of government benefits – Research the benefits that are provided by the federal government for families affected by special needs. You may qualify for assistance.
- A will in place – Make sure you have beneficiary arrangements and a current will that align with your other planning strategies.
MassMutual: A Resource for the Special Needs Community
Over the past decade, MassMutual SpecialCare Program has built a solid foundation in helping families develop a life-care plan for their loved ones with special needs. Across the country, MassMutual’s SpecialCare Planning Teams have built Community Resource Networks to provide families with financial education and resource network of care providers specializing in everything from educational seminars on life-care planning and special needs estate planning attorneys to sensory friendly movie nights and horseback riding therapy. MassMutual’s specially trained Special Care Planners and Chartered Special Needs Consultants are standing by to answer many of the questions and pressing needs that special needs families face daily.
For resources to help get started with your life care planning*, logon to massmutual.com/for/special-needs. To find a Special Care Planner** near you, logon to massmutual.com/connect-with-us/financial-professionals.
*A Life Care Plan is a coordinated program of future care planning, financial and legal strategies for people with disabilities and their families. A Life Care Plan continually changes throughout an individual’s lifetime and is provided by a team that may include legal and tax advisors, as well as insurance and investment professionals.
**No one professional can provide everything a family needs. An integrated team comprised of an attorney, a CPA and others such as social workers and caregivers and financial professionals who specialize in working with special needs, all working together, is the best way to serve the client. We recommend you choose to work with professionals who are qualified, experienced and involved in the area of special needs.
The Special Care Planner is a title used by MassMutual financial professionals who have received advanced training and information in estate and tax planning concepts, special needs trusts, government programs, and the emotional dynamics of working with people with disabilities and other special needs and their families. The certificate program was offered by The American College in Bryn Mawr, PA, exclusively for MassMutual financial professionals. Additionally, a designation of Chartered Special Needs Consultant ( ChSNC), which evolved from the certificate program, is now offered through the American College for financial professionals. MassMutual financial professionals who have completed the certificate program, or received the ChSNC designation can use the Special Care Planner title.
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The Easter Seals Many faces of Caregiving Study was sponsored by MassMutual and conducted by Impulse Research Corp. The survey was conducted online in January 2015 online with a random sample of 1043 men and women ages 25-49. The overall sampling error rate for this survey is +/-3% at the 95% level of confidence.
Founded in 1851, MassMutual is a leading mutual life insurance company that is run for the benefit of its members and participating policyowners. The company has a long history of financial strength and strong performance, and although dividends are not guaranteed, MassMutual has paid dividends to eligible participating policyowners consistently since the 1860s. With whole life insurance as its foundation, MassMutual provides products to help meet the financial needs of clients, such as life insurance, disability income insurance, long term care insurance, retirement/401(k) plan services, and annuities. In addition, the company’s strong and growing network of financial professionals helps clients make good financial decisions for the long-term.
MassMutual Financial Group is a marketing name for Massachusetts Mutual Life Insurance Company (MassMutual) and its affiliated companies and sales representatives. MassMutual is headquartered in Springfield, Massachusetts and its major affiliates include: Babson Capital Management LLC; Baring Asset Management Limited; Cornerstone Real Estate Advisers LLC; The First Mercantile Trust Company; MassMutual International LLC; MML Investors Services, LLC, Member FINRA and SIPC; OppenheimerFunds, Inc.; and The MassMutual Trust Company, FSB.