The Financial Crisis Facing Your Adult Daughters

Jackie Bedard
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As an estate planning and long-term care planning attorney, I talk to people every day about long-term care planning.  Many of our married clients may view this as a conversation about taking care of each other.  Due to life expectancy differences between men and women, and sometimes age differences between husband and wife, it is often assumed that the wife will provide any needed caregiving to her husband, and the husband is concerned about making sure he does not leave his wife financially compromised.  Sometimes, they might also think that the conversation is about being able to afford their care, while still trying to preserve some of their estate for their children.

But you know who else has a large financial risk in the equation?  Your children—especially your daughters. 

Many of us have already heard the common statistics:

  • Everyday 10,000 people turn 65 in this country;
  • 2 out of 3 people age 65+ will require long-term care;
  • 20% of people age 65+ will require long-term care for five years or longer; and
  • The average costs of such care are rapidly increasing. 

I recently read the in-depth study The MetLife Study of Caregiving Costs to Working Caregivers: Double Jeopardy for Baby Boomers Caring for Their Parents (if you want to read the full report, just “google” that title).  Here are some staggering statistics from the report that you might not be familiar with:

  • 66% of caregivers are women and 34% of caregivers are men.
  • The percentage of adult children providing care to a parent has more than tripled over the past 15 years.
  • The total estimated aggregated lost wages, pension, and Social Security benefits for these caregivers of parents is nearly $3 trillion.
  • For women:
    • The total individual amount of lost wages due to leaving the labor force early because of caregiving responsibilities equals $142,693.
    • Social Security benefits and pension benefits are calculated based upon a person’s wages, so lower wages also ultimately means lower social security and pension benefits.  The estimated impact of caregiving on lost Social Security benefits is $131,351. A very conservative estimate is that pension benefits would be reduced by approximately $50,000.
    • Thus, in total, the cost impact of caregiving on the individual female caregiver in terms of lost wages, pension, and social security benefits equals $324,044.
  • For men:
    • The total individual amount of lost wages due to leaving the labor force early because of caregiving responsibilities equals $89,107.
    • The estimated impact of caregiving on lost Social Security benefits is $144,609.
    • A very conservative estimate is that pension benefits would be reduced by approximately $50,000.
    • Thus, in total, the cost impact of caregiving on the individual male caregiver in terms of lost wages, pension, and social security benefits equals $283,716.

These same caregivers are expected to live into their mid-80s.  How will they afford their own care later in life if they can’t save for it at midlife while they are caring for someone else?

The good news is that today, we have lots of long-term care planning options available.  When we work with clients on long-term care planning, we discuss these matters and help clients explore which long-term options might work best for them based upon their goals, finances and family circumstances.  I view my role as an estate and long-term care planning attorney to help you build a solid foundation that can weather future storms. 

Free Caregiver’s Guide:

Solid legal and financial planning is critical for a loved one with long-term care needs. Download our free Caregiver’s Guide to learn the critical information you need to know about caring for your loved one.