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More Americans Pay Steep Price for Plunge Off 'Caregiving Cliff'

About 43.5 million American adults currently work as unpaid caregivers, at considerable economic and emotional cost. And that number is growing.

by Kelli B. Grant, CNBC /

Seventeen-year-old Maggie Ornstein was skiing in Lake Placid, New York — her first big trip away from home — when she got the phone call that changed her life. Her mother, Janet, 49, had suffered a brain aneurysm.

"I was a senior in high school, and my biggest concerns until then were the prom, graduation and heading to college," said Ornstein, now 37. "In my mind, on the long drive home (to New York City), I remember thinking that she'll be in the hospital for a while and then home, good as new."

Not quite. Ornstein's mother sustained permanent brain damage from the injury and spent the next five years in hospitals and long-term care facilities, relearning basic skills like talking and walking. "It was two years before I took a day off from seeing her," said Ornstein, who was thrust into the role of caregiver — handling medical bills, coordinating care and navigating a labyrinth of social services.

She decided to attend college in Brooklyn, allowing her to remain at home, where she could help her grandmother with household chores and care for her mom after she returned home.

Fast-forward to 2015, and Ornstein, now a lecturer at the New School and Sarah Lawrence College, is still her mother's primary caregiver. She intends to remain so as long as both are alive. (Her grandmother passed away in 2011 at age 102.) "Caregiving is the most rewarding thing you can do in life, but it's the hardest, too," she said.

Ornstein became a caregiver at an unusually young age, but she has plenty of company.

In the past year, about 43.5 million American adults worked as unpaid caregivers, the bulk of them to an adult age 50 or older, according to an AARP Caregiving report released in June.

Aside from a brief swell during the recession, that figure has held fairly steady over the years, but the ranks of caregivers have shifted to include more men and young adults — a quarter of caregivers are millennials, AARP found. And the number of caregivers is expected to grow as baby boomers age into retirement.

Caregiving need is ‘growing and growing’

It's not just hands-on care: 8 percent of baby boomers, 13 percent of Generation X and 19 percent of millennials are financially supporting a parent, to the tune of an average of $12,000 a year, according to a survey of 1,000 adults released this summer from TD Ameritrade. Of those, 31 percent said they are also caregivers for that parent.

"We have the combination of people who aren't saving, and who are getting older and living longer," said Juliana Menasce Horowitz, associate director of social trends research at Pew Research Center.

From 2012 to 2050, the Census Bureau projects, the size of the U.S. population age 65 and older will nearly double. The ranks of the so-called "old old," those 85-plus, will more than triple over that period.

"We are seeing, without a doubt, that the caregiving need is just growing and growing," said John Schall, chief executive of the Caregiver Action Network.

Among adults 51 to 54, 82.8 percent are currently "at risk" of needing to provide care for a parent or in-law due to health concerns, according to a 2014 report from The Urban Institute. Yet paid care is out of reach for many.

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"The typical retirements don't cover the costs we're looking at," said Massachusetts state Rep. Chris Walsh, who was a caregiver for his mother and currently cares for his father. Earlier this year, he co-sponsored a family caregiver support bill in the legislature.

Assuming no nursing home or home health costs — either because they are not needed or are paid for by another entity — 72.1 percent of those 60 to 64 have amassed enough savings to retire, according to an assessment from the Employee Benefits Research Institute.

Including long-term care costs, only 56.5 percent of that age group is retirement ready. Among workers age 55 to 59, factoring in long-term care costs triggers a drop in readiness ratings from 72.7 to 57 percent.

There are long-term-care insurance policies and other options to help cover costs, but few people have them due to a combination of high premiums and insurers exiting the business, said Richard Johnson, director of the Urban Institute's program on retirement policy. "It hasn't worked well as an option," he said. Even if there's such a policy in place, "it doesn't reduce the care you get from your children all that much," said Johnson. "Caregiving is not something people can completely pay for and be done with it."

Aging individuals can expect to have progressively fewer family members to turn to. "What creates some of the increasing pressures on families is that family size will be smaller in the future than it is now, so there will be fewer children to provide care," said Johnson.

More people are also expected to enter old age divorced or never married, removing the option of a spousal caregiver, he said.

In 2010, according to AARP, the support ratio of potential caregivers ages 45 to 64 for each person 80 and older was roughly 7:1. By 2030, they expect, that will be 4 to 1, and by 2050, 3 to 1. "We call it a caregiving cliff, and we're starting to go over it," said Susan Reinhard, senior vice president and director of AARP's Public Policy Institute.

What it all boils down to: "It's likely going to be on you," said Reinhard. "(Caregiving) is a universal phenomenon now."

Mounting costs of caring

For many people, whether to help an aging parent isn't even a question. Three-quarters of Americans say they believe it's their responsibility to provide financial assistance to a parent if needed, according to a 2013 Pew Research Center report. "It's just me," said Mandy, 56, who is caring for her 93-year-old mother in New York's Queens borough. (She asked that her last name be withheld for privacy concerns.) "She's my mom. What else am I supposed to do?"

But the financial effects of caregiving can add up fast. "Nobody ever realizes that not only are they doing this, but it's going to cost money, too," said Schall of the Caregiver Action Network. Even if the care recipient has assets or insurance to cover most expenses, caregivers spend an average $5,500 out of pocket each year, he said. The TD Ameritrade survey puts the annual financial support figure closer to $13,000 to help out mom and $8,500 for dad.

Ornstein, who has regularly worked outside the home on a part-time basis over the years, says caring for her mom makes a full-time job impossible. "Despite all this care labor I have put in over the years, when you look at my Social Security statements, it seems like I've done very little," she said.

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 Janet and Maggie Ornstein. Maggie Ornstein

Aside from the disability, her mom is healthy at age 69, but Ornstein worries about her falling on the stairs at home. She's also concerned about her own health, with symptoms of back trouble after years of lifting her mother and grandmother. And she worries about her own financial future. "It's scary," said Ornstein. "You can't plan because you don't know when things will change."

Tory White, 52, said when her mom needed to transition to assisted living in 2010 for her dementia, the $3,200 monthly cost came out of her own pocket initially until Medicaid, Social Security and other programs began to cover most of the bill. It was a struggle, White said, to balance her mom's wish to stay at home against her own limits. "I thought that love would take me through," said White, who has been caring for her mother since 2007. "I realize now, the duty and the love have to be balanced."

It's less common to see money flow the other way, from a parent to the family member providing care, said Schall. Even if the parent has enough savings for that, doing so creates other problems. "There can be family dynamics where other siblings resent if it's taken out of the family reserves," he said.

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The stress of the role can also add to caregivers' health-care bills. Caregivers are more likely to suffer from depression, said Schall, and report higher rates of chronic conditions including heart disease, diabetes and arthritis. "You feel guilty thinking about yourself, but you have to," he said. "It is taking a toll."

Caregivers' costs are enough to strain budgets. Only 28 percent of so-called sandwich-generation adults supporting an aging parent and children say they're living comfortably. About 11 percent don't have enough to meet basic expenses, according to the 2013 Pew report.

In the TD Ameritrade survey, 22 percent of financial supporters said they have had to dip into savings, and 14 percent have added to their debt, which is already significant, at an average $22,000 in nonmortgage debts like student loans, credit cards and personal loans. A third have delayed saving for retirement.

Caregivers also feel the impact on the earnings side. "It's still the case that a lot of caregivers are juggling care and employment responsibilities," said The Urban Institute's Johnson. The average caregiver spends 24.4 hours each week providing care, reports AARP, which is like having another part-time job.

Caregivers are more likely to work fewer hours or take part-time jobs, according to the institute's 2014 report. More than a third of caregivers in the TD Ameritrade report had reduced work hours or taken (unpaid) time off from work, while 26 percent delayed or plan to delay retirement and 15 percent had changed jobs. Among caregivers surveyed by AARP, 6 percent gave up working entirely.

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Mandy returned to work in February after a four-year break to care for her mother, whose health concerns include sleep apnea and memory issues. "It was hard to get back in the workforce, because I had this gap on my resume," said Mandy, who works in real estate. She also dug into her savings to be able to take that time away from work. "By her not having an aide, we save money, but it puts a lot of stress and frustration on me," she said.

Being back at work is a tough juggle. "I'm busy, and I feel like I'm worried all the time," said Mandy. She said she's glad that her mother doesn't require round-the-clock care, but even so, she has spent most of the past year living with her mother to handle the care duties. She rarely visits her own apartment. "I just go there to get my mail," she said.

Three-quarters of caregivers are in the role for less than five years, according to the AARP, but depending on when in life that occurs, the financial damage could be lasting. The average caregiver is in his or her late 40s or early 50s, said Amy Goyer, AARP's home and family expert who has, over the years, been a caregiver for her grandparents and parents, as well as one of her sisters. "That's a critical time," she said.

Caregivers age 50 and older who leave the workforce lose an estimated $303,880 in income and benefits, according to a 2011 MetLife study.

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The net effect is that caregivers may find themselves needing financial help. "We do see that people who provide care have less wealth in old age than those who didn't," said Johnson.

The Urban Institute estimates that each wave of parent care increases the likelihood of the caregiver falling into poverty by 3 percent, or 11.9 percent if it's intensive care. "There's a question of how that is then going to impact your children," said Johnson. (In the TD Ameritrade study, 16 percent of financial supporters said that, as a result of their support, they anticipated needing some help themselves in retirement.)

Planning for the inevitable

"My hope is that we get more private and public solutions for this, so that there's less demand on (family caregivers)," said the AARP's Reinhard.

Progress has been made on both the federal and state levels, she said — including expanding Medicare coverage for telemedicine and chronic care coordination, and state CARE laws requiring hospitals to better coordinate with caregivers — and more proposals are in the works. In late August, Rep. Nita Lowey, D-New York, introduced a bill to provide a Social Security earnings credit to people who leave the workforce or reduce work hours to provide unpaid care to a family member.

There's also an increasing awareness that family caregivers supporting loved ones often need some support themselves — emotionally, financially and logistically. "It's a very lonely experience for people," said Andy Cohen, chief executive and co-founder of Caring.com. "This is something people keep really private, and it makes it worse."

Five Planning Strategies for Future Caregivers

Still, caregivers say getting help is often complex, and frustrating. "There's nobody really telling you what you need to ask to get your problem solved, so there's a whole lot of work," said Ornstein. "The system retraumatizes us over and over." Even small efforts to ease the workload can become cumbersome. While caring for both her grandmother and mother, for example, she found that there was often little overlap in the services each qualified for: Her mother was often too young, while her grandmother didn't fit the medical needs criteria.

"It left me in limbo," she said. More recently, Ornstein tried to arrange for a volunteer to come by weekly and play Scrabble with her mother, but discovered one couldn't be sent without providing another service like hot meal or food pantry deliveries (which the family doesn't need, and seemed wasteful to Ornstein). Other hoops included an in-home social services interview before the volunteer could be sent.

Five Planning Strategies for Adults Who Need Care

Whether you expect to need care someday, or you see the prospect of being a family caregiver on the horizon, planning on the part of both generations can also help. "Emotional reluctance is keeping people from being prepared," said Tina Collins, 50, who has been a caregiver for 13 years, first for her father and later, her mother. "It's a habit that gets passed down."

Some of the important early steps include marshaling your resources to get a sense of what care options might be available and affordable, having a family discussion about caregiving needs and roles, and looping in a financial adviser to determine ways to prepare financially for the prospect of care or effectively use assets.

Family caregiving is a tough situation to think about, much less discuss openly, but it's a topic caregivers say needs to be talked about more, among families and as a pressing public issue — particularly as the number of Americans who will need or give care continues to grow.

"It's not like any of us aren't going to get old," said Collins. "Unless we die young, and that's not a good alternative either."

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