Presented by Trevor Kurth, CFP®
Two out of 10 people in America will provide custodial care, mostly in addition to their full-time jobs.1 With a fifth of adults preparing to or already providing care for aging loved ones, it’s important to recognize the sacrifices - both financial and physical - they make every day. Below we’re taking an in-depth look at who are considered family caregivers, how this responsibility impacts them and how individuals can prepare for the future costs of custodial care.
What Is Custodial Care?
Custodial care is considered non-medical care that is provided to those in need of assistance when performing activities of daily living (ADLs). Examples of ADLs include using the bathroom, getting dress, eating, moving around the house, grooming and bathing. It is most often provided at home by family caregivers, but in some cases, it may be provided in a nursing home or long-term care facility.
Who Are Family Caregivers?
Around two-thirds, or 66 percent, of family caregivers are women - spouses, sisters, daughters or daughters-in-law.1 Custodial care may also be provided by a professional caregiver, but professional care can get expensive. The national average cost for professional caregiving is $23 an hour.2
While being a caregiver is often an act of love, family members who provide custodial care often suffer from:
- Temporary or permanent pause on career and/or family life
- Emotions including stress, fatigue, anger or depression
- Resentment or anger among siblings
- Financial loss
- Worry and guilt
Impact of Caregiving on Women
Family caregivers spend around 24.4 hours per week providing care, but nearly 25 percent of caregivers spend 41 hours or more per week providing care.3
Women in the workforce already face a lifetime wage gap. Women are typically paid about 82 cents to every dollar a male counterpart earns. Over the span of a year, this wage gap translates to a loss of about $10,194 in median earnings.4
With women already facing their own financial hurdles in the workplace, the effects of becoming a family caregiver can further exacerbate the issue.
As family caregivers, women have faced financially impactful decisions, including:3
- 33 percent decreased their work hours
- 29 percent passed up a job promotion, training or assignment
- 22 percent took a leave of absence
- 20 percent switched from full-time to part-time employment
- 16 percent quit their jobs
- 13 percent retired early
Custodial care has enormous practical, physical and emotional consequences for family members who provide this care - including stress, anger and substantial financial loss.
One of the most important components of financial planning is addressing the need for custodial care.
Why Medicare May Not Cover Custodial Care
Medicare considers custodial care by a family member to be “unskilled” care. In some cases, Medicare will cover “skilled” care that’s provided by a qualifying health professional. This could include a Registered Nurse (RN) or Licensed Practical Nurse (LPN).
These “skilled” services are typically considered to be short-term and an alternative to recovering in a hospital or nursing facility. Examples of these services include:
- Patient monitoring
- Wound care for a pressure ulcer or surgical incision
- Administration of intravenous drugs or nutrition therapy
- Catheter changes
- Education for caregivers and patients
When Medicaid May Cover Custodial Care
Your state’s Medicaid program may provide payment for custodial care. The rules will vary state by state, but Medicaid may pay after someone has spent the vast majority of their personal assets.
Preparing Financially For Custodial Care
With proper planning, caregiving can be a fulfilling and satisfying experience. Having solid financial resources can be a massive relief to caregivers because it enables them to hire a professional to provide all or part of the necessary care. Allowing the family member to coordinate the bulk of the care instead of being the primary provider of that care can make a huge difference.
It may be worthwhile to consider products specifically designed to cover custodial care costs. Some products may cover the care costs altogether, while others could be used to generate income. Your financial professional can provide details on long-term care insurance, hybrid products, or alternative financial solutions.
Having a plan in place to fund custodial care can greatly benefit family caregivers by allowing them to supervise a plan of care rather than deliver it. For those worried they may need custodial care one day, it can help make sure you have the means to get the care you need without the guilt of interfering with your loved one’s life. Proactive planning can create a better quality of life for families, caregivers, and beneficiaries alike.