Before Caregiving Puts a Crack in Your Nest Egg – Find a Financial Gerontologist

As I began to research this blog article for January’s Financial Wellness Month, I came across a fact that seems serendipitous – the financial planning industry is about the same age as the average family caregiver – between 48-50 years old.

This seems fitting because as we continue to search for life rafts in the silver tsunami of aging Baby Boomers, becoming a caregiver has to be part of your future financial plan.  In fact, having a caregiving plan in place may mean the difference between sinking and swimming, financially speaking.

The cold hard facts of aging and caregiving are hard to ignore:

  • Live expectancy in 1900 was age 47; in 2000 it jumped to age 77
  • At age 65, 20 percent of us can expect to live to age 90
  • 1 in 50 Boomer women will live to age 100
  • 1 in every 2 adults over age 85 will develop Alzheimer’s disease

Whether you will be caring for an older parent or other relative, or whether you or your spouse will have special care needs – caregiving is a life event you will be facing.

Finding a Trusted Expert

While many of us turn to experts in helping us map out our financial future and protect that nest egg – there is a new crop of financial wizards that are emerging specifically to help us navigate the “what ifs” of aging and possibly caring for older parents.

This new breed of financial planners is Registered Financial Gerontologists (RFG).

According to Dr. Neal Cutler, one of the founders and current acting president of the American Institute of Financial Gerontology (AIFG), “Our goal is to ensure that credentialed financial planners gain more insight and expertise into the aging of America – we don’t train professionals on financial planning we train them to better serve their older clients through the understanding of aging and longevity issues.”

The curriculum of AIFG is to help financial planners gain credentialed multidisciplinary expertise, building on relevant teachings from biology, psychology, sociology, and demography to understand the lifelong wealth span issues and aspirations of aging individuals and their families.

For instance, a financial planner with RFG training will be better equipped to understand the costs associated with modifying your home or your parent’s home so they can “age in place” (the aging industry euphemism for living in your home as long as possible), or how to understand the costs and issues around driving and transportation needs, meal delivery, home health aide costs and even how to navigate some of the emotional minefields that can appear as you and your parents look towards the future of possibly being an 80, 90 or even 100-year-old.

The Shock Factor – Avoiding the Caregiving Cost Drain

While there is a lot of discussion around the emotional and physical tolls of caregiving – it is the financial toll which can sometimes be most shocking to family caregivers.

A National Alliance for Caregiving study called Family Caregivers – What They Spend, What They Sacrifice, found that more than half of all caregivers (44 million caring for someone over age 50) spend on average 10 percent of their annual income on out-of-pocket care-related costs – items such as prescription drugs, home safety modifications, in-home services or Adult Day Care, food and meals, household goods, transportation and legal fees.

Photo: Pakhnyushchyy/Dreamstime

All this spells D-I-S-A-S-T-E-R when it comes to the wellness of your financial future – and caregivers certainly have more risk and higher burdens.

When you consider we still have a struggling economy and a higher than expected jobless rate – many families are dipping into 401K and other retirement savings, adding more debt or even moving into the same household with aging parents in order to stay afloat and care for mom or dad at the same time.

But there is hope!  According to Bob Veres of Financial Planning magazine, “Dramatic change in any profession requires two things: motive-represented in this case by two very different shocks to the system-and opportunity, which in this case comprises significant evolution in the tools and support structures that surround financial services practices.”

While today there are only 300 financial planners who have gone through certified training as a financial gerontologist – the opportunity of growing needs of an aging customer base and the motive of an increased need for financial experts to deliver quality services will hopefully see a surge in those experts who can help guide caregivers to a financial higher ground.

My hope for caregivers is that we see a rise in financial planners who become credentialed in Financial Gerontology, so we can have yet another member of your care team who will be looking out for your future best interests — keeping all the caregivers well – in body, mind, spirit and pocket books!


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