The Hidden Cost of Caregiving: Uncovering the Financial Toll on American Families

Across the United States, family members providing care for their loved ones contribute an estimated $600 billion in unpaid services annually, sacrificing their time, money, and often their well-being to care for aging relatives. As Congress considers a bill that would offer family caregivers a tax credit, quantifying the true value of this labor has proven to be a complex challenge.

Unlocking the Hidden Costs of Caregiving

The Caregiver's Dilemma: Balancing Life, Work, and Loved Ones

Amy Goyer, a caregiving expert for AARP with over 35 years of experience, understands the personal and financial toll of caregiving all too well. When her mother suffered a stroke in her late 60s and her father was diagnosed with Alzheimer's disease, Goyer had to upend her life to care for her aging parents. This meant paying for home renovations to ensure their safety, as well as losing income and career opportunities due to the time she dedicated to their care."It was financially devastating for me," Goyer recounted. "I don't have regrets about anything I did in caring for my family, but I ended up in bankruptcy after my dad passed away." Goyer's story highlights the growing burden faced by millions of American families, as the Harvard Business School reports that 73% of workers surveyed provide some form of caregiving at home.

Quantifying the Cost of Caregiving: A Daunting Task

Shon Lowe has been caring for her mother, Terrie Montgomery, since her Alzheimer's diagnosis a decade ago. The financial impact on Lowe's family has been substantial, with AARP estimating that family caregivers spend an average of $7,242 of their own money each year, not including the time spent on tasks such as managing medication, finances, and food preparation.To better understand the true cost of caregiving, Salary.com and Otsuka Pharmaceuticals, a maker of medications for neurological disorders like dementia, have created a new tool called the Family Caregiver Calculator. When Lowe entered the hours she and her siblings spend caring for their mother, the result was a staggering $270,103 per year."It's unbelievable," Lowe said. "Something should be done about that."

Seeking Financial Relief: The Struggle for Caregiver Support

The creators of the Family Caregiver Calculator hope to spur policymakers into action, advocating for legislation that would provide much-needed support and resources for unpaid family caregivers. As Amy Goyer explains, "We largely don't have enough support. We're putting our caregivers' financial security in jeopardy. They're not going to have the money to pay for someone to care for them."While some states have programs that allow family caregivers to receive compensation, these opportunities are limited. A recent report to Congress by the Recognize, Assist, Include, Support and Engage (RAISE) Family Caregiving Council proposed several potential solutions, including a federal tax credit for family caregivers, immigration reform to expand the caregiver workforce, and expanding grant programs for states.The Credit for Caring Act, introduced in Congress this year, would provide a federal tax credit of up to $5,000 to qualifying caregivers. AARP is actively advocating for the passage of this bill, emphasizing the critical need for financial relief for families struggling under the burden of caregiving.Without such support, Goyer warns that the financial strain of caregiving will only continue to grow, with the burden being passed down from one generation to the next. "What we're doing is we're putting the financial security of our caregivers in jeopardy in the future," she said. "So they're not going to have the money to pay for somebody to take care of them."