When it comes to tending to a parent or other family member, just 58% of Black caregivers are ready financially for current or potential caregiving duties versus 67% of all caregivers, including their white peers.
Two in three Black caregivers—68%—cite their biggest fear is not being able to provide care for those they love. That statistic is especially disconcerting because Black Americans caring for elderly family members has been a deep-rooted expectation dating back to slavery.
Yet, COVID-19 has not only disrupted that notion but is also creating havoc on younger generations of Black caregivers. They often are among the ones older family members rely on. The financial challenges of Black caregivers are progressively falling to Generation X and millennials as baby boomers age. A Nationwide Retirement Institute Survey of 313 Black caregivers shows how they are being jolted by the pandemic.
And the picture could get bleaker as the number of American adults 65 and over is expected to more than double to 71 million by 2030 from nearly 35 million in 2000, recent data from the CDC’s Morbidity and Mortality Weekly Report shows. By 2030 there is likely to be a shortage of 100,000 elderly caregivers, according to the U.S. Census Bureau. This will put even more pressure on Black family members to be caregivers, says Kristi Martin Rodriguez, senior vice president of the National Retirement Institute (NRI).
All told, 65.7 million Americans served as family caregivers during the past year and about 13% of adult caregivers in the United States are Black, the National Alliance for Caregiving shows. That accounts for nearly 9 million Black caregivers, a number being driven up by COVID. Martin Rodriguez and Hope Patterson, a communications coordinator at Nationwide, have first-hand experience as caregivers. Check out here how Martin Rodriguez talks about her caregiving experience as well as helpful tips she offers caregivers. Patterson elaborated on her encounter of being a caregiver for her family.
Martin Rodriguez says because most people are confronted with caregiving issues just as they reach the peak earning years in their careers, and many are forced to pass up promotions at work or must quit their jobs entirely because of their caregiving responsibilities, many families will take a financial hit.
“Missing out on those high-earning years also impacts how much caregivers will receive in Social Security benefits for the rest of their lives.”
Concurrently, many caregivers are dealing with the financial strain COVID has created for them to offer the services without jeopardizing their retirement plans. Plus, younger Blacks are facing the extra stress of balancing regular job demands while trying to be caregivers.
Martin Rodriguez says the solution has to be making caregiving easier for future generations.
“If there’s one silver lining in the pandemic, it’s been the increased sense of urgency among younger Black caregivers to discuss financial planning with family members—including long-term care.”
Black caregivers are much more likely than all adults to have discussed long-term care with their family (64% vs. 41%). It often involves having another family member as a backup caregiver. “While we have the discussion as a family, often there is not a long-term plan on how to cover costs,” Martin Rodriguez says. “This is especially concerning due to the longevity of seniors and fewer earning years for caregivers.”
Some of the top findings from the NRI survey of Black Caregivers that reveal how the pandemic has intensified caregiving challenges include:
Many Black caregivers are worried they cannot protect their loved ones from getting sick (67%) and 54% feel that they cannot take a day off. While nearly three-quarters (73%) wish they had more help with their caregiving duties, two-thirds (67%) would not be comfortable having an at-home care provider.
Half say the pandemic has impacted their financial ability to provide care. Black caregivers spend an average of 32 hours a week providing care. Millennial Black caregivers spend $6,832 a year in out-of-pocket expenses on caregiving, and Black Gen Xers spend an average of $5,694. Only 4% of Black Americans say they have talked to a financial professional about long-term care costs.
Balancing Work and Caregiving
Some 35% of millennials and 38% of Gen Xers say they are afraid their responsibilities at work could cause them to have to stop providing care to their loved ones, and 32% of millennials and 42% of Gen Xers are even fearful their caregiving duties could cause them to lose their job.
Martin Rodriguez noted over half of Black Americans surveyed worry more about their financial stability now than they did before the pandemic. In fact, she says, the pandemic is really bringing a sense of urgency for many Black Americans to focus on things such as financial planning, putting your health first, legacy planning, emergency planning, and retirement planning.
So, what steps should Black caregivers who are now dealing with the financial squeeze as well as preventative measures for those who will face this inevitability be taking now?
Martin Rodriguez offered tips that could be guideposts to help improve a person’s financial position. She says Black caregivers can start rebuilding wealth by taking six steps:
1. Talk about money and have a plan for your money. Know what is coming in and going out.
2. Live within your means (make prudent decisions about your money. Create a budget that includes things like fun and entertainment.)
3. Start saving and investing now. (Nationwide is working to diversify the industry so you can work with a professional that understands you).
4. Prioritize your health, making mental health a line item.
5. Make a long-term plan for your loved ones, where the conversation between members of different generations needs to occur.
6. Consider life and long-term disability insurance, which are trusted vehicles for growing your money. Interestingly, Nationwide’s CareMatters policy allows owners to use the benefits for a wider variety of long-term care options, including paying a family member to care for them.
Amid today’s uncertainty, it is more important than ever to work with a financial professional and use online tools to help plan for the unexpected and make long-term goals a reality. She says Nationwide’s Health Care/LTC Cost Assessment tool provides a meaningful, personalized cost estimate that will help financial professionals and clients plan for future medical and long-term care expenses.
And probably most important, Martin Rodriguez says, start saving and investing now as there is nothing like the power of time when it comes to building wealth.
She explained how she was a caregiver for her father who lived out of state, which presented its own challenges. Along with having to drive from Ohio to Michigan, she faced the stress of worrying about him when she wasn’t able to be there. She added, thankfully, she was able to provide care and work flexible hours. But she noted many people do not have that luxury. Rodriguez also cared for her grandmother for 24 years.
“We need employers, financial advisors, and government officials working together to explore better ways to help vulnerable people as they grow older and better ways help the family members who provide them care.”