According to the latest findings from Northwestern Mutual’s 2021 Planning & Progress Study, the impact of the COVID-19 pandemic has been felt especially hard among the nation’s caregivers.
In fact, one in five (21%) of Americans said that they are currently providing care for someone, and among them, nearly six in ten (59%) said that they have had to take on new or expanded caregiving responsibilities during the pandemic, according to Kamilah Williams-Kemp, vice president, Risk Products, Northwestern Mutual.
More than a quarter (27%) of caregivers said that they do not receive any additional help, Williams-Kemp said.
Other Survey Findings
Of the 73% who said that they receive help, this help is most often from family and friends:
- Family – 53%
- Friends – 25%
- Community groups – 14%
- Health care professionals – 11%
“Caregiving, even in the best of circumstances, poses significant emotional, lifestyle and financial challenges,” Williams-Kemp said. “Layer on top of that a global pandemic, which has disrupted and altered many people’s lives in so many ways, and the toll it is taking on caregivers has spiked.”
Financial Impact On Caregivers
On average, nearly a third (31%) of current caregivers’ monthly budget goes toward providing care. Those costs include professional support, as well as expenses for services caregivers provide themselves.
What’s less apparent in the numbers is the financial uncertainty that providing care can lead to. For example, Williams-Kemp pointed out that 35% of current caregivers are not sure how much of their monthly budget goes toward providing care.
“This is a difficult topic for many families to address, especially ahead of when a caregiving scenario is actually required,” Williams-Kemp said. “But it’s critical that long-term care be part of financial planning conversations.”
Spotlight On Long-Term Care
Increased caregiving responsibilities over the last 20 months have prompted many Americans to pay more attention to long-term care. The study pointed out that a third (34%) of adults have planned for their own long-term care needs.
Among them, more than half (53%) said that the pandemic has changed their views on long-term care. As a result, they have taken specific steps toward preparing for their needs, including:
- Increasing their savings – 46%
- Incorporating long-term care into their financial plan – 39%
- Talking to their financial advisor – 37%
- Purchasing long-term care insurance – 36%
“Planning for long-term care has been thrust onto the financial radar for many Americans during the pandemic,” Williams-Kemp said. “Long-term care coverage provides flexible options for in-home care, in addition to facilities like nursing homes and assisted living centers, giving people access to the type of care that makes the most sense for their unique situation. It’s good to see that a growing number of people are taking action, and hopefully this is the start of what will be a longer-range trend.”
Because of the increased caregiving responsibilities brought on by the pandemic, a door has been opened for financial advisors to have meaningful conversations about LTC with their clients and prospects, Williams-Kemp added.
As they meet with them, they can emphasize the fact that LTC can provide them with peace of mind and the ability to prepare for the unexpected. There is no other time than now for advisors to take on this critical role, she said.
The 2021 Planning & Progress Study was conducted by The Harris Poll on behalf of Northwestern Mutual and included 2,320 American adults aged 18 or older who participated in an online survey between March 16–26, 2021.
Ayo Mseka has more than 30 years of experience reporting on the financial-services industry. She formerly served as Editor-In-Chief of NAIFA’s Advisor Today magazine. Contact her at [email protected]