The “Shadow” Care Giving System and Economy

There are several hidden threats to retirement that are not being proactively or adequately addressed by the financial community. There are multiple reasons for this. In many cases, it is because the scale and severity of the financial problems that these risks generate are not well understood and they may not be integral parts of established financial planning processes or templates. Generally, there is a need for planning tools and resources for financial professionals to access in order to help clients deal with the physical, emotional, and financial impacts of these life-changing risks.

We started this series of articles focusing on the painful family consequences and extended economic impacts of the opioid epidemic along with the resources available for financial advisors. We turn our focus in this article to the emotional and economic heart of providing short-term and extended care across family generations that has created a “shadow” caregiving system – one that is not formally organized and is populated with individual family members or extended friends or partners. They will do what needs to be done for their loved ones’ care with no real training or knowledge about the vast body of available support, services, options, and programs to help a loved one plan, support them during, or deal with the crisis stage in their caregiving journey.

To provide much needed context, AARP’s report, Valuing the Invaluable, paints a startling picture of the current state of family caregiving in our country:

“In 2021, about 38 million family caregivers in the United States provided an estimated 36 billion hours of care to an adult with limitations in daily activities. The estimated economic value of their unpaid contributions was approximately $600 billion.”

To better understand the scale and complexity of this challenge, we reached out to Carroll Golden, speaker, best-selling author, and Executive Director, NAIFA Centers of Excellence, Limited & Extended Care Planning Center. As a leading expert and evangelist on this topic, Carroll points out that it is painfully clear that many families and their financial advisors are unfamiliar with the evolving needs or personal dynamics involved in short-term, extended, or long-term care until it is too late. Few have the knowledge or experience to create an organized approach.

Carroll’s first book How Not To Tear Your Family Apart is intended as a text guide for financial professionals and is filled with resources, links, and references. Her second book How Not To Pull Your Family Apart: A Practical Guide to Caregiving and Financial Stability, is a multigenerational example of how her three-step planning roadmap works in the real world.

Carroll's latest book, How Not To Pull Your Life Apart Caregiving: Overcome Challenges and Objections to Planning Conversations, intricately combines first-person narratives, her personal journey, and thorough investigative research. Within its pages, she provides invaluable suggestions for surmounting the obstacles and objections often veiled by silence and resistance when planning for extended care. Through her three-step roadmap, Carroll unveils insightful responses and reasoning that guide readers in navigating through critical conversations with finesse and effectiveness.

Hortz: What should we know about the problems and issues about caregiving that we as an industry need to be addressing?

Golden: In the U. S., caregivers account for more than ninety-five percent of informal care. When you reach the number of caregivers that we are seeing, and the number of states showing interest in creating studies, legislation, or a task force to deal with long-term care as it affects their constituency and long-term services and support programs, then it is clearly time for those of us in the industry to step up.

AARP’s study indicates that in 2021, the estimated economic value of family caregivers’ unpaid contributions was approximately $600 billion, based on about 38 million caregivers providing an average of 18 hours of care per week for a total of 36 billion hours of care, at an average value of $16.59 per hour. This conservative estimate does not consider the financial cost of care (out-of-pocket and lost wages) or account for the complexity of care provided (i.e., medical/nursing tasks). This $600 billion estimate for 2021 is up from $470 billion in 2017 and continues a 25-year trend of increasing economic value. It also corresponds to what the study has found that the value of unpaid family care vastly exceeds the value of paid home care.

Caregiving is often very rewarding, but there are many challenges that arise along the bumpy caregiving journey. Some are individual challenges and some are universal.

• The sandwich generation is growing. A recent AgeWave study reported that 47% of adults aged 40–59 are simultaneously raising children and caregiving for aging parents.

• Sandwiched caregivers are also often trying hard to save for retirement, complicated by the fact that many are helping to provide financial support to their families. According to a recent AgingCare.com survey, 62% of caregivers say cost of caring for a parent impacted their ability to plan for their financial future.

• 81% of caregivers are employed, 64% full-time. The impact on workplace production is growing due to employee caregiver responsibilities.

Hortz: What is your Three Step Plan that you outline in your new book on addressing the caregiving challenge and how did you develop this plan?

Golden: My personal involvement in my family's extended care journey provided me with a valuable hands-on experience. Equally significant was the challenging dynamic of the family I married into. Like many families, we found ourselves hesitant to initiate conversations about care. I realized that initiating and sustaining such discussions requires a structured approach, a roadmap, to ensure that they lead to concrete plans or agreements. This excerpt from my latest book illustrates the hidden, “unspoken” concerns caregiver Jodi, and her parents, have:

Caught in the sandwich generation, Jodi slowly morphs from the casual helper to the ‘on-call’ caregiver heading towards ‘full-time’ caregiver.

• Failure to start the conversation can pull client’s and their family’s stability apart:

  • Her parents are not sure how to approach their planning concerns,

  • Her parents are unsure or unaware of extended care options,

  • Jodi worries her parents will not share their real needs,

  • The rest of the family doesn’t know how to discuss the impact on Jodi without sounding invasive.

The three-steps planning roadmap I developed are the foundation for planning. They can be used in any order and personalized for any situation.

• The Care Guide is filled with current, accurate information about each family member. The information is only shared when the owner or an event “triggers” it. It is the “I CARE” conversation.

• The Care Squad designates who does what when needs arise. Family members who have a role - act, those without a role - act out. It is the “What If” conversation.

• The Care Planning Team provides structure for multigenerational discussions and assessments. As a group, they discover available options that suit each generation’s short, extended, or long-term needs. It is the “Discovery” Conversation.

Hortz: Your newest book also focuses on how best to address starting and continuing difficult family conversations. How do you recommend effectively dealing with objections and challenges on your client’s caregiving journey?

Golden: Both financial advisors and consumers shared with me their experiences of meeting with resistance when broaching the topic of extended care planning. I delved deeper, asking them to recount their dialogues, or lack thereof. This exploration inspired me to write the third book in the series, focused on overcoming the hurdles and objections encountered in planning conversations.

Following various objections and challenges encountered in planning conversations, I offer suggestions, dialogues, or stories to illustrate different approaches. For example:

1. Objection: “I don't want to talk about it!” (You’re also hearing-“I don’t want to lose control!”)

   • Suggestion: As we mentioned above, many family members do not want to lose control or feel marginalized. Use my Overcome Challenges and Objections to find an approach that will help facilitate the conversation.

   • Dialogue: “I understand it's not easy, but I want you to stay in control of your future.” By breaking the conversation into three steps and leveraging the Jones family story as an entry point, you can open a dialogue about planning for the future in a supportive and non-threatening way. You can illustrate how the three-steps kept the future care recipient in control.

   • Story: Share a personal anecdote or the story of the Jones family. Discuss how they learned about multiple options and how planning ahead relieved everyone’s stress.

2. Objection: "I can't afford it."

   • Suggestion: The Care Planning Team is designed for financial professionals to facilitate conversations about insurance and non-insurance options that will fit almost any budget. Explore various financial options and emphasize the value of prioritizing care.

   • Dialogue: Use the Jones family example to suggest real world dialogue or use the suggestions in the newest book to understand how to move the conversation along. The emphasis is always someone’s well-being and financial stability.

   • Story: Highlight the Jones family as a case study where creative financial planning made care more affordable and accessible.

3. Objection: "I don't want to burden my family."

   • Suggestion: Discuss the benefits of planning for care needs in advance. Use the Care Planning Team (CPT) step to involve the family in decision-making. Discover projected longevity and various ideas for aging-in-place. Emphasize the possible not the impossible.

   • Dialogue: Take the focus off any one individual to ease their concerns. Suggest that everyone creates a Care Guide. By planning now, we can ensure that everyone's needs are considered, and no one feels overwhelmed or a burden to someone else.

   • Story: Share the story of Jodi’s family in my book to illustrate how a family’s open communication eased caregiving responsibilities.

4. Objection: "I'm too young to think about this."

   • Suggestion: Use the Care Squad in the context of a short-term care need to highlight the importance of planning and the unpredictable nature of life.

   • Dialogue: Use the Care Planning Team to include fun activities and discover new information. Advisors make good facilitators or mediators in case of discord. Financial professionals take on the role as a multigenerational advisor.

   • Story: Share any of the stories in any of my books as cautionary tales of someone who faced unexpected care needs without a plan in place.

By addressing objections with empathy, providing practical solutions, and sharing relatable stories, we can facilitate productive planning conversations and ensure better outcomes for everyone involved.

Hortz: How are you and NAIFA playing an important role to help advisors provide the greatly needed support and guidance to these serious caregiving challenges for their clients?

Golden: As an established speaker and author on the topic, I often present on the impact of caregiving on retirement, workplace employment, legacy planning, and financial planning.

Our efforts at NAIFA are to raise awareness about the seriousness and need for action on these major threats to retirement for American families and the economic repercussions that they generate. By our compiling the best resources of people, approaches, and services available from academia, government, along with industry and medical experts on how best to deal with these risks, we are building easily accessible advanced financial planning and support centers for financial professionals to be able to help their clients and their families. We are continually expanding the scope of the NAIFA Centers of Excellence as new products, new technology, and new approaches are being offered.

Hortz: What best advice can you share with advisors and financial planners on the role they need to play in the Caregiving Economy?

Golden: The Census Bureau indicates that members of the Baby Boomer generation turning 65 will peak in 2024. Approximately 4.4 million Americans will turn 65 this year. That is an average of roughly 12,000 per day. It is a mind-blowing number but it screams opportunity and necessity. By 2030, all boomers will be over 65. There are spoken and unspoken complications that financial professionals should anticipate given these demographics.

Recently, I published an article titled, Know Any Career Extenders? where I was talking about the nature of career extenders. They are everywhere and some are your clients! Why are so many Baby Boomers working beyond the traditional retirement age of 65? The various answers imply financial issues that advisors need to consider before extended care needs disrupt client lifestyle and retirement choices.

Perhaps your client is part of the sandwich generation where we already reported that 47% of adults aged 40-59 are raising children while also caring for aging parents and 62% of those caregivers say the cost of caring for a parent are impacting their ability to plan for their financial future.

There are serious implications to these realities that advisors can assist with. It is important to recognize that caregiving impacts numerous aspects of both the care recipient’s and caregiver’s financial life, including income, expenses, investments, and estate planning.

Leading the NAIFA Centers of Excellence, along with my books, are ways that I support financial professionals who need education, practical approaches, and support when they step outside of their specialty and are faced with discussing short-term, extended, or long-term care with their clients.

Aside from my books, as a professional speaker, I have developed workshops, seminars, informational materials, and referrals to relevant professionals, such as elder law attorneys, product specialists, crisis planners, technology supports, and apps, etc. It’s a community of caring and it is available to you to bring to your clients and their families at a time that is most needed!

Related: Next Steps for Wealth Management Technology

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