The Nexus of Health Care and Financial Security

The cost of health care is often cited as a threat to the financial health of retired Americans. What’s less publicized is how caring for someone else in poor health can impact a person’s financial wellness, both before and into retirement.

A new study by the Transamerica Center for Retirement Studies and the Transamerica Center for Health Studies—both parts of the Transamerica Institute—documents the risk. It finds that acting as a caregiver, while often emotionally rewarding, can have a toll on the caregiver’s financial well-being.

In a talk at the 2018 SVIA Spring Seminar, Hector De La Torre, executive director of the Transamerica Center for Health Studies, said the new study surveyed more than 3,000 non-professional caregivers. Among that group, 44% reported that their financial well-being is either fair or poor. Nonetheless, nearly a third—30 percent—said they are spending between $100 and $500 a month out-of-pocket on their care recipient, and 18 percent said they are spending more than $500 a month. Nearly one in five—18 percent—reported dipping into their retirement accounts to make ends meet while acting as a caregiver.

Caregiving also can have an impact on a caregiver’s career. Sixty percent of the surveyed caregivers said they are employed, and among that group 76 percent said they had made an adjustment to their employment as a result of caregiving—with 28 percent reporting an adverse reaction from their employers. Thirty percent of working caregivers said they’ve used paid time off to care for a loved one, 26 percent said they’ve missed work days, and the same percentage said they’ve reduced their hours or job responsibilities.

While 65 percent of caregivers said their own health had remained basically unchanged since they became caregivers, 17 percent said it had declined. A surprising 15 percent said their health had improved, with many in that group saying that caring for someone else had prompted them to take better care of themselves.

More than half of caregivers—55 percent—said their caregiving duties have left them emotionally or physically exhausted, and 88 percent said they wanted more information to help them with their responsibilities. In response to those findings, De La Torre said, the Transamerica Institute has produced a 28-page guide for caregivers, available free on its website at

Whatever the consequences of providing care for someone else, De La Torre said, the survey found that most caregivers entered into that role with little thought to their own needs. “Sixty-nine percent say they paid little or no consideration to their own financial situation before they decided to become a caregiver,” he reported. “Something happens suddenly—an accident or a medical condition comes on—and they step up and they just keep doing it over time.”

Among the most common caregiving duties performed are household chores (cited by 89 percent of the survey respondents), social communication (72 percent), health-related duties (69 percent), personal care (62 percent), medical-related activities (49 percent) and paying bills and tending to other financial issues (43 percent). A little more than a third of the surveyed caregivers reported spending 100 hours or more per month on caregiving.