Tuesday, November 20, 2007

The Cost of Caring for Elderly Loved Ones

Here's an article worth reading from the New York Times: Study Finds Higher Costs for Caregivers of Elderly:

The out-of-pocket cost of caring for an aging parent or spouse averages about $5,500 a year, according to the nation’s first in-depth study of such expenses, a sum that is more than double previous estimates and more than the average American household spends annually on health care and entertainment combined.

Family members responsible for ailing loved ones provide not only “hands on” care but often reach into their own pockets to pay for many other expenses of care recipients, including groceries, household goods, drugs, medical co-payments and transportation. That nudges the average cost of providing long-distance care to $8,728 a year.

These caregivers, spending on average 10 percent of their household income, manage the financial burden by taking out loans, skipping vacations, dipping into savings or ignoring their own health care.
Here's another interesting aspect:

In addition to the telephone part of the survey, the report also includes detailed information and narrative accounts from 41 men and women who were paid $100 to keep expense diaries over the course of a month. This subgroup — not a representative sample because they were self-selected and were paid — reported sharply higher expenses than the telephone respondents.

The diarists spent an average of $12,348 a year — more than double the annual expenses of the larger, randomly selected telephone sample. In addition, the diarists who lived with their older relatives, spent the most — $14,832 a year, followed by $14,064 for long-distance caregivers and $8,496 for those who lived nearby.

That part may not be representative as far as appropriate survey methods are defined, but I wonder if it's closer to the truth than the average from the broader sample? I am a firm believer in keeping records of expenses, and I tend to think that when people estimate their expenses, they end up underestimating them, as it's easy to forget how much you've spent. Either way, these numbers are pretty daunting.


frugal zeitgeist said...

You've hit a topic near and dear to my heart. My parents are in their 80's. I don't pay for their expenses directly because they don't need my money: they saved all their lives so as to be able to enjoy a really nice retirement. Having said that, I pay indirectly. Not all of these costs are measureable in terms of dollars. They include:

--Flights to and from the West Coast every eight weeks (Six to seven a year - about $3500 total)
--Phone calls twice a day (Nationwide phone plan)
--Had to make special accomodations at work to work remotely three or four times a year(Hard to put a dollar value on that)
--95% of my vacation time spent with my parents (ditto)
--Vacation time is mostly spent cooking, cleaning, and driving my parents to appointments (ditto)

I don't begrudge the time and certainly don't begrudge the money, but I'm nearly 40 and have only had one vacation as an adult that was longer than a weekend and didn't involve family obligations. I'd kind of like to take a real vacation someday.

Cue the violins. . .

Anonymous said...

Interestingly there's an entire generation caught at the moment ... they are between caring for aging parents (sometimes paying as many elderly outlive their savings) and funding children. I unfortunately know too many (perhaps even me someday) who haven't been able to 'raise adults.' Many rely on their parents for much more and for much longer than previous generations. I often wonder what it is going to be like for a significant number who do not prepare for retirement or old age?

E.C. said...

My parents aren't currently spending money on my grandparents, although that is a distinct possibility in the near future now that most of my grandparents' savings has been spent on my grandfather's care. However, my grandparents' needs have had a significant impact on my parents' finances. My mother has stuck with a relatively low paying part-time job despite being offered a promotion and full-time employment; she needs flexibility and time to handle her parents' needs.

Anonymous said...

I heard a story similar to this on NPR. They were trying to advocate for some sort of elder care insurance for family members. It was really tragic. People in the prime of their lives are having to do everything for their ailing parents. I hope it leads to some change in legislation to help these folks.