According to an Edward Jones Canada survey, 92 per cent of caregivers are contributing financially.Rudzhan Nagiev/iStockPhoto / Getty Images
Although the majority of Canadians are proud to step in as a caregiver for a loved one, there are often major financial consequences, according to a new report published this week.
The Financial Impact of Caregiving, released by Edward Jones Canada in partnership with Age Wave and the Harris Poll, featured responses from more than 2,100 Canadian caregivers.
One key financial finding: Canadian caregivers not reimbursed in full by their loved one spend more than $7,000 a year, on average, out of pocket to support the care recipient, says Julie Petrera, director of financial planning at Edward Jones Canada in Toronto.
Ms. Petrera spoke with Globe Advisor about the report.
What surprised you about the findings?
The willingness of Canadians to take this on, even at the expense that it has on themselves. Seventy-three per cent of Canadians overwhelmingly want to support the people they love, even though doing so means making financial sacrifices.
When we asked Canadians if they thought there was a financial impact to caregiving, many of them said no. But the data showed that, actually, 92 per cent are contributing financially.
What’s the extent of their financial contributions?
If we’re talking about long-term care planning, the care recipients may have planned for that directly. But in the case in which a caregiver is taking on some financial aspects, we see them reducing their own employment, tapping into their own savings, running up credit card debt and even reducing their own retirement fund contributions.
So, for example, if you’re taking unpaid time off work, that not only results in lost wages today, but it can reduce retirement savings or even Canada Pension Plan eligibility later. That can impact the caregiver financially both now and later.
What did you learn about why people become caregivers?
Our data found that, 43 per cent of the time, becoming a caregiver was based on the closest relationship. Thirty-seven per cent of the time, it’s based on proximity. Thirty-five per cent of the time, it’s based on the amount of available time a person has. In 29 per cent of cases, they were the only person willing to take on the role. And 22 per cent say they were the elected caregivers because they were the most qualified based on some type of training or previous experience.
How can advisors help clients who are caregivers?
Advisors can help them understand the impacts of caregiving now. We’re always stress-testing plans, running what-if scenarios to understand the impact on retirement planning or any other goals.
Advisors can also make sure caregivers have their own documents established and up to date and that the right people are named as beneficiaries or powers of attorney. So, if one day they need care, they can make that role as smooth as possible and we see that in the data. It says Canadians don’t want to be a burden on their own family members if and when the time comes.
This interview has been edited and condensed.
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