According to a new Merrill Lynch study, eight in 10 Americans consider their role as caregiver to a family member as the “new normal.” Forty million Americans are currently caring for 50 million adults and facing financial strain.
Out-of-pocket expenses caused added stress for 66 percent of caregivers, who said they would benefit from financial advice. On average, caregivers spend $7,000 dollars per year for personal, medical and household needs.
"It's not a good idea to tap your retirement funds to cover caregiving expenses,” said James D. Gothers, a national insurance specialist executive at Bank of America Merrill Lynch, in a statement. “If you shortchange your financial future, you could inadvertently become a financial burden to your own family.”
Caregiving is an underestimated need in our society, with seven in 10 adults over 65 anticipated to require prolonged care. Approximately 68 percent of Americans believe they will rely on one of their family members for long-term care if needed.
Caregivers take on extreme emotional and financial responsibility if unable to share caregiving duties with other family members. Those caring for a spouse are two and a half times less likely to have a team than those providing care to an aging parent.
Cynthia Hutchins, the director of financial gerontology for Merrill Lynch Wealth Management, says in the study it’s important not to leave your job or reduce your hours at work to take care of an elder, which could have you paying for your own health insurance and other benefits—including your retirement plan.