Every year, older adults lose billions of dollars to fraud. Trusted financial care partners — who help older adults pay their bills and monitor their accounts — serve as a critical defense against scammers.
Some elders benefit from loved ones contributing to the costs of care. However, a recent study from Age Wave and Merrill Lynch notes that financial caregiving often comes in the form of financial management in addition to monetary contributions.
Financial Contribution and Coordination: Integral Components of Caregiving
More than 90 percent of care partners say their roles entail financial caregiving. In most cases, financial care partners have a pre-existing relationship with the older adult — often as a family member — and are trusted to manage finances and communicate about the situation.
Financial care partners can fulfill a number of roles, including paying for or contributing to the costs of care. They also may manage investments, pay bills, oversee insurance and taxes, and monitor various accounts for any signs of fraudulent activity.
Nearly 70 percent of care partners provide financial assistance toward the care of an individual. In some cases, multiple members of a family serve as financial contributors. More than three-quarters of care partners believe that if a sibling does not help care for a parent directly, the sibling should contribute financially.
Care partners who serve as financial contributors spend an average of $7,000 annually for medical and personal needs for their older adult relative. Many financial contributors give significantly more, especially if a relative has cognitive impairment or lives far away.
Obstacles for Financial Care Partners
For most financial care partners, responsibilities increase over time. After two years of care, more than half of care recipients require help with all their financial dealings, the study notes. In that same timeframe, approximately 12 percent of care recipients have the ability to manage their finances without assistance.
Meanwhile, nearly three-quarters of financial care partners say they experience stress because of their responsibilities. Many financial care partners say that providing monetary assistance compromises their own future financial status.
In cases of serious illness, discussing finances can be difficult, so many financial care partners give without knowing the extent of their contributions. This inability to quantify spending on caregiving can make planning difficult for care partners.
Support for Financial Care Partners
Research on the intricacies of financial caregiving and the effects on care partners and their families so far remains limited. However, many care partners note that they could benefit from additional training, support and resources. As the baby boomers continue to reach retirement age and the number of elder Americans grows, further exploration of the needs of financial care partners and recipients will become even more critical.