RBC Wealth Management recently collaborated with Ipsos to poll more than 2,000 Americans ages 35 and older, finding 17% of respondents regularly help an older family member with chores, cooking, cleaning or traveling to appointments.
In addition, 5% provide no-cost housing and 5% offer other financial support to older family members, RBC’s survey shows.
As the U.S. population ages, the responsibility of caring for aging relatives is falling largely to next of kin. In sum, according to the survey, one in five (19%) American adults currently assists an older family member in some capacity. What is more striking in the survey results in the sizable monetary contributions that many Americans are putting up each month to support older relatives. The survey found that among those who provide financial support to an older relative, the average monthly contribution is $403. Twenty-two percent contribute $500 to $999, and 14% contribute more than $1,000.
“As lifespans increase, and as the cost of health care reaches new heights, many adults are shouldering the responsibility of ongoing support for their family members,” explains Angie O’Leary, head of wealth planning at RBC Wealth Management U.S. “It’s important for individuals to have a financial plan in place so they can help care for their relatives, while also preparing for their own financial future.”
According to O’Leary, retirement readiness for caregivers is possible, but it’s not going to be easy to establish. In addition to the financial burden, the emotional burden of caring for aging relatives can be daunting.
“Among respondents who have a senior relative in their life, 10% say one they help care for has been diagnosed with some form of dementia, and another 9% say someone else in their family has been similarly diagnosed,” O’Leary notes.
According to the Alzheimer’s Association, 5.7 million Americans are living with Alzheimer’s disease, a figure that is expected to reach 14 million by 2050.
“As cognitive decline becomes an increasingly significant part of Americans’ lives, it is having a massive impact on families’ finances, not only due to increased medical expenses but also because those with dementia may make financial missteps and are at increased risk for becoming targets of fraud and abuse,” O’Leary warns. “Many of the survey respondents are experiencing these effects firsthand.”
Among those respondents with a senior family member, one in ten (11%) either knows or suspects that their loved one has been a victim of financial abuse. This figure rises to 30% among those with a family member they care for who has been diagnosed with dementia. According to the survey, 28% of respondents in this group have taken formal steps with a financial institution or lawyer to protect their family member’s finances in light of a diagnosis, and a similar proportion (29%) have taken some informal steps. Forty-three percent have taken no steps at all.
“Only about half of the people we surveyed say they’re familiar with the steps to take if they suspect an older relative has been a victim of abuse,” warns Jen McGarry, who heads RBC’s client risk prevention division. “Families are certainly doing their best in these situations, but the industry has a significant responsibility and role to play in protecting vulnerable populations.”
McGarry and O’Leary say advisers should work closely with clients and their families to understand how cognitive disease can put them at risk, and to put safeguards in place to preserve their dignity and their assets.
The RBC survey shows many Americans are also caring for younger family members with disabilities and other life challenges. A fifth of all survey respondents (21%) say they have adult children who they help support financially. This figure rises to 23% among the respondents who are mothers and 24% among parents between the ages of 35 and 54. Parents in higher-income households are most likely to be supporting adult children, at 25%. According to the survey, among those respondents providing financial support to adult children, the monthly contribution averages $445. For parents in high-income households, the figure is $681.