Caregiving today, long-term care tomorrow: Are your clients ready?


Do your clients know about caregiving resources?


November is National Family Caregivers Month—a time to honor the contributions of friends and family members who support loved ones with physical challenges or cognitive issues. And the chances are quite good that some of your clients are caregivers or at some point in their lives will be. How can you best support them?

For starters, it’s useful to recognize just what society would pay for the labor that family caregivers provide without charge. The numbers are eye-opening: About 40 million family caregivers provide 37 billion hours of care, worth an estimated $470 billion, according to an AARP report issued just a few years ago—and these numbers have likely gone up since then.

In human terms, here’s the story: Each day, parents, children, siblings, and spouses selflessly sacrifice their time and energy to care for family members affected by illness, injury or disability. Caregiving can exact an emotional, physical, and financial toll, so it’s important for caregivers to know that their labors of love are appreciated, and to recognize that they need support as well.

And as a financial professional, you can provide some of that support in three key areas. First, you can recommend some financial moves specific to caregivers. Second, you can help them prepare for their own needs by discussing long-term care. And third, you can provide clients with some suggestions on where they can find resources specifically designed for caregivers.

Financial tips for caregivers

Family caregivers spend an average of nearly $7,000 per year on out-of-pocket costs related to caregiving, according to an AARP study. And these costs don’t include lost wages, lesser ability to contribute to retirement plans and other key financial areas. Consequently, your financial guidance can be indispensable to your caregiving clients. Here are a few pieces of advice you may want to offer:

  • Think carefully before leaving your job. “Before leaving a full-time job to assume caregiving responsibilities, consider your options. Can you take a leave of absence? Can you stay on as a part-time employee and maintain your benefits? As you know, having a benefit package—especially if it includes good health care coverage and a 401(k) or similar retirement plan—can be of great value.”
  • Maintain an emergency fund. “During the daily stresses and activities of caregiving, it’s easy for caregivers to dip into their own savings—and after a while, these repeated withdrawals could eventually drain those savings. Try to build or replenish an emergency fund containing three to six months’ worth of living expenses, with the money held in a liquid, low-risk account.”
  • Prioritize your retirement savings. “It’s obviously admirable to serve as caregiver to a loved one, but you can’t totally forget about your own financial needs—especially the need to save for retirement. If you can keep working at least part time you should be able to continue contributing to your 401(k) or other employer-sponsored retirement plan.”
  • Prepare for your own aging. “As you handle caregiving duties, you will likely become more familiar with various legal and estate-planning documents—and you’ll probably realize that you may well need to incorporate these documents into your own plans. For example, you’ll want to create a medical power of attorney, a will, and possibly a living trust, among other arrangements. You might also want to provide a trusted relative or friend with access to your account information in case you become suddenly incapacitated.”

Talk to clients about long-term care

Your clients who are caregivers, having recognized the tremendous emotional, physical and financial costs involved, may want to do all they can to spare their younger family members as much of these costs as possible. And that’s why you may want to encourage them to explore some type of long-term care protection.

Of course, they may not think they will ever need such care, and they may be right—but the odds might not always be in their favor. Someone turning age 65 today has almost a 70 percent chance of needing some type of long-term care, according to the U.S. Department of Health and Human Services. This could range from occasional home health care visits to a few weeks in a rehab center or to a multi-year stay in a nursing home.

And none of it is inexpensive, either. For example, it costs more than $100,000 per year, on average, for a private room in a nursing home, according to the 2020 Cost of Care Survey produced by Genworth. As you know, but your clients may not, Medicare typically pays very little of these costs. And clients can’t count on Medicaid to help, either, unless they “spend down” most of their assets – which is hardly desirable.

So, unless your clients are capable of putting away vast amounts of money to self-insure, you may want to bring up the subject of long-term care insurance. You’re probably aware that the product line has expanded in recent years, moving beyond traditional long-term care (LTC) policies to include hybrid/linked benefit insurance, which provides a death benefit plus long term care coverage, and life insurance with long-term care/chronic illness riders, which allow policyholders to accelerate all or part of their death benefit to pay for long-term care costs.

Talk to your clients about which type of long-term care coverage is best for their individual needs—and the sooner, the better, because, as you certainly know, the longer people wait to buy these policies, the more expensive they’ll become.

Your clients may also want to visit any of these sites, which contain information about long-term care:

  • – Official Medicare website, providing information on plans, programs, coverage, and publications.
  • Medicare & You (2020)  – Annual publication containing up-to-date information on plan coverage and changes to Medicare.
  • – Research site for professionals and family members looking for information on aging, eldercare, and long-term care. Site also provides information on legal, financial, medical, and housing issues, along with research and statistics.
  • – U.S. Dept. of Health and Human Services Administration on Aging website for long-term care information. Site contains LTC Pathfinder, which offers planning considerations and options for individuals in various age groups.
  • – America’s Health Insurance Plans (AHIP) website, including Guide to Long-Term Care Insurance. This guide will help individuals understand the risks and costs associated with long-term care and how long-term care insurance may help protect them.

Resources for caregivers

Caregivers can often feel isolated. After all, it’s not easy spending hours, usually alone, in the home of loved ones who may be suffering from physical or mental ailments, or both. But you can provide a great service to your caregiving clients by reminding them that they do have resources available to assist them in their duties.

One good starting point is their local Area Agency on Aging (, which provides information about seniors’ services, including in-home services, meals, transportation, chore help, respite, caregiver consultation, housing options, prescription drug help, Medicare and other insurance-related issues.

You might also want to suggest that your caregiving clients learn more about these services and professionals:

  • Telephone Assurance Program (TAP): Once enrolled in this program, seniors will receive regular telephone calls to ensure they are doing well and/or have taken their medication. They’ll also get “good cheer” calls from “telebuddies” who can provide friendly conversation, as well as information about helpful community resources.
  • Companion care: Local agencies will send individuals to seniors’ homes to run errands, do housework, organize medicines and provide social stimulation.
  • Respite care providers: Respite care providers offer short-term or emergency senior care in the absence of a primary or family caregiver – or just to give caregivers a break to look after their own needs. Respite care can take place in the home, at special day-care centers or in residential centers that offer overnight stays.
  • Visiting nurses: Registered nurses (RNs) come to patients’ homes to provide a range of medical care, rehabilitation, and hospice services.

Your clients can go online to learn about the local agencies and organizations that provide these services. Encourage clients to ask about fees, regulations, insurance coverage and other key issues related to these providers.

Show caregiving clients that you care

As the financial services industry moves toward a more “holistic” business model, you’ll want to demonstrate that you can provide value in all parts of your clients’ lives—including their roles as caregivers. So, show them that you do care—you’ll brighten their days during a challenging time.

You may also find valuable information in the article Paying for health care in retirement.

These resources notes are neither owned nor controlled by RBC or any affiliated company. Links are provided as a courtesy and are neither endorsed nor reviewed by RBC. Your clients should consider all source of reliable information available before making any financial decision.

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