Hidden Costs of Becoming a Family Caregiver

A majority of caregivers assisting older individuals are family members. Typically, these family caregivers are spouses and adult children. Becoming a family caregiver does place a variety of burdens on people that assume this role. Indeed, there are some hidden costs of becoming a family caregiver which are discussed in this article. These include:

  • Wage loss
  • Healthcare costs
  • Career issues
  • Loss of savings
  • Negative impact on retirement planning
  • Out of pocket expenses
  • Wear and tear on vehicle
  • Increased utility costs

Wage Loss

Most of the women and men who are serving as caregivers for a family member are also working. The commitment to assisting in the care of a family member nearly always necessitates an adjustment in the amount of time that individual is able to work. 

In some instances, a family caregiver needs to reduce his or her work hours indefinitely. Even if this is not the case, a family caregiver will find that he or she will need to take time off from work on a recurring basis.

Healthcare Costs

A family caregiver likely will also experience an increase in out of pocket healthcare expenses. At the extreme end, a family caregiver may not be able to maintain full time employment, the employer being the source of health insurance. This can require a family caregiver to go onto COBRA (insurance continuation after employment). The caregiver will be responsible for making insurance premium payments while on this continuation plan.

In the alternative, a caregiver may have to procure a health insurance policy on his or her own. In a terrible scenario, an individual may need to go without health insurance and run the risk of picking up all healthcare costs directly and personally.

Career Issues

As was mentioned a moment ago, being a family caregiver can impact availability for work. There can be other impacts on a person’s work life when that individual takes on care for a family member. 

Because of the alterations in work as a result of becoming a family caregiver, an individual assuming this position is very likely to experience more substantive career issues. For example, a family caregiver may miss out on pay raises and even promotions.

Loss of Savings

As a result of career alterations and other financial issues that will be discussed in a moment, becoming a family caregiver can have an impact on a person’s savings. A person providing family caregiving very well may experience a loss of savings. A family caregiver oftentimes finds his or her self in a position of having to use savings in order to meet basic living expenses for his or her self. 

Negative Impact on Retirement Planning

A wise course of action for a person to take is to start planning for retirement fairly early on in his or her working life. Of course, many individuals are not as dedicated to this process as they really should be in this day and age. In any event, becoming a family caregiver many times has a negative impact on retirement planning.

One of the ways in which becoming a family caregiver can impact retirement planning is found in the fact that a person assuming this position is apt to have a reduction in income. In other words, an individual may not have enough income to meet basic or essential living expenses and contribute to a retirement fund.

Another of the ways in which assuming the position of a family caregiver can negatively impact retirement involves a current cash shortfall. If a family caregiver is not able to earn a necessary income, he or she may be left with having to dip into retirement funds. Obviously, taking money out of retirement when a person should be making contributions can be a truly negative state of affairs.

Out of Pocket Expenses

A family caregiver is also likely to experience an increase in out of pocket expenses. While a caregiver is entitled to reimbursement for expenditures made on behalf of a family member for whom the caregiver is providing assistance, that does not always occur. A caregiver is very likely to buy things here and there for the person being assisted. Within the course of a year, the amount of money expended out of pocket can prove to be rather notable in many instances.

Wear and Tear on Vehicle

When an individual takes on the care of a family member, that caregiver is nearly always going to have to drive the family member to different appointments and for various other reasons. The need to provide a family member with transportation when acting as a caregiver will result in additional wear and tear on that caregiver’s vehicle. The reality is that the level of wear and tear to a vehicle can prove to be significant.

Increased Utility Costs

In some instances, a family caregiver will experience increased utility costs. This most often occurs because a person assuming the role of a family caregiver will have the cared for family member move into his or her home. The addition of a new person into a caregiver’s home typically does have the net effect of increasing utility costs each month to some degree. Over the course of a given year, this increase in utility costs can be rather significant.