Page 25 - Leisure Living Magazine May 2016

The Real Cost Of C.A.R.E.
According to
the Centers for
Disease Control
and Prevention,
life expectancy in
the U.S. is at a re-
cord high of 78.8
years and con-
tinuing to climb.
As Americans live
longer, the pros-
pect of becom-
ing a caregiver or
needing one is an
undeniable reality.
In fact, the U.S. Department of Health and Hu- man Services estimates that 70 percent of adults 65 or older will require some form of long-term care (“LTC”). However, Northwestern Mutual’s new C.A.R.E. (Costs, Accountabilities, Realities, Expectations) Study suggests that Americans are not prepared for the financial and emotional im- plications of caregiving.
Though many caregivers ultimately find the experience very gratifying, the day-to-day realities could be quite sobering. According to the C.A.R.E. Study, the majority (59 percent) of Americans feel that taking care of two adults be- tween the ages of 85 and 90 could be harder than managing two children, ages 3 and 5. This may explain why three in 10 caregivers experience anxiety while nearly half say they are routinely tired.
Kamilah Williams-Kemp, vice president, long-term care, Northwestern Mutual, notes that caregivers often don’t know what to expect until they are in the situation. “People tend to believe that caregiving is mainly about chores like food shopping, so the intimate nature of some of the tasks and the general role reversal between par- ent and child can be quite eye-opening,” says Wil- liams-Kemp.
The largest gap between perception and real- ity may be around financial considerations. Expe- rienced caregivers who have incurred expenses as a result estimate those costs comprised roughly a quarter of their monthly budget. Among Amer- icans who anticipate future caregiving costs,
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two-thirds say that would have a significant toll on their finances— yet four in 10 have not planned for how they would cover them.
“Tapping into savings/retire- ment funds or reducing discre- tionary spending are common ways of managing the
financial pressures of caregiving,” continues Wil- liams-Kemp. “However, this approach may actu- ally create more stress because it impacts lifestyle and future financial security.”
Northwestern Mutual’s 2015 Planning & Progress Study showed that Americans are al- ready concerned about having sufficient savings to take care of their own needs. More than one in 10 (12 percent) think there is a 100 percent chance their savings will run out someday, while many working Americans expect to delay retire- ment past traditional retirement age due to neces- sity, citing insufficient savings as a key reason.
The good news is that it’s possible to take con- trol of your potential long-term care needs, which could help mitigate the stress regarding care de- cisions for your loved ones. Williams-Kemp sug- gests the following: •Recognizethatyouhaveoptions.Whileit’sbest to get a jump start on long-term care planning, there is a range of solutions at various life stages that can be integrated into your financial security planning.
• Have a candid conversation. Long-term care is a challenging topic but understanding your family member’s wishes and expectations for care, as well as addressing your own, can be key to building a sound financial strategy.
• Talk to a financial professional. Don’t underes- timate the value of expert guidance in navigating complex scenarios and tailoring a strategy that aligns with your individual goals, needs and re- sources.
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