Research shows caregiving duties sent 43% of them looking for advice in the first place
Fifty-one percent of Canada’s financial caregivers work with a financial advisor, and 43 percent of those first sought professional advice because of their caregiving duties.
Edward Jones Canada research conducted with Age Wave and The Harris Poll, titled The Financial Impact of Caregiving, found that more than 3.6m Canadians act as financial caregivers for an adult aged 65 or older, contributing approximately $20bn a year.
Seventy-one percent entered the role with little or no planning.
Scott Sullivan, principal and Canada business segment leader at Edward Jones, said financial duties often go unnoticed in caregiving.
He said millions of Canadians are “managing bills, accounts and financial decisions for loved ones, often for years at a time,” while putting their own finances at risk.
Canadian caregivers spend an average of seven years in the role and roughly 89 hours a month on caregiving duties.
Seventy-six percent are employed, and 54 percent are sandwiched, caring for an older adult while supporting at least one child.
Ninety-two percent spend their own money on behalf of the person in their care, and 84 percent are not reimbursed in full.
Average annual out-of-pocket spending among those not fully reimbursed reaches $7,025, rising to a net $10,190 a year where the recipient’s own resources are insufficient.
Forty-four percent have reduced or stopped saving, 25 percent have cut contributions to retirement accounts, 22 percent have borrowed money, increased debt or delayed repaying it, and 21 percent have stopped working entirely.
Forty-nine percent say caregiving has negatively affected their own health.
Tracey McLennan, head of high net worth and legacy planning at Edward Jones Canada, said caregiving can affect a person’s finances through “drawing on savings, postponing retirement goals or putting career aspirations on hold.”
She said these decisions “can compound over time” and, without a plan, affect the caregiver’s long-term finances.
Seventy-four percent of financial caregivers manage their care recipient’s everyday financial matters, and 36 percent rely on financial or legal professionals for help.
Forty-six percent assist with legacy affairs, where financial or legal professionals are involved 49 percent of the time.
Only 22 percent of care recipients hold all three of a will, a designated power of attorney and a health care directive.
Eighty-four percent say they do not want to become a burden on their own families in future, while 73 percent say they would reduce their own financial security to support a loved one today.
Edward Jones calls the tension a generosity paradox.
Seventy-six percent say caregiving has changed how they prepare for their own future, prompting them to organize their financial information, update wills and legacy plans, increase savings, and seek professional financial guidance.
Sixty-nine percent of caregivers whose care recipient died remained responsible for financial and legacy matters afterwards, spending an average of 9.7 months settling estates, financial accounts, and personal property.
