Introducing Ration Financial

I don’t know why I was surprised when Kathy began to cry over the phone. I suppose I had been expecting to have a practical conversation about the logistics of caring for an elderly parent, but for Kathy those logistics are merely the visible skin on a deeply complicated, emotional, and painful experience that has sunk its teeth into nearly every aspect of her life - from her work and leisure time, to her childhood memories of her father, to her relationship with her spouse, and her hopes-turned-fears of the future. 

Kathy is a friend of my moms and is one of nearly 16 million Americans (primarily women) who have taken on the responsibility of caring for their aging parent or parents. This number is increasing every year, and demographic data tells us that isn’t going to change any time soon. 

When I started to take an interest in the topic of care-giving, and a little research showed me the scale and difficulty of the myriad problems, I reached out to my mom, curious if she could introduce me to any of her friends who could help me understand the human side of the story. Even knowing what little I did at that point, I shouldn’t have been surprised when my mom immediately turned over a list of ten or more friends in her immediate circle who were either actively living this experience or recently had before a parent had passed away. 

Now, before we get into a little of that human side, let’s set the table with some facts and data about what we are up against. 

• Like I said before, an estimated 16 million Americans are acting as care-givers for an elderly parent, although this number is probably larger and can be hard to judge because levels of care vary widely and the topic is a sensitive one that many prefer not to discuss or wouldn’t even think to report in any formal way

• I specifically used (and will continue to use) the term “care-giver” because level of care may be anything from driving to doctors appointments, to making sure bills get paid, to financial assistance, to having a parent move into one's home, or more. 

• Most primary care-givers are women, but this is a situation that impacts entire families in most cases. Lots more on this to come. 

• I won’t go to crazy with data (yet) but here are some basics about US population demographics 

  • There are currently about 31 million retired Americans.

    • 1.9 million people over the age of 90.

    • 15.5 million between 75-90.

    • 73 million over the age of 60.

    • Baby boomers: 65 million (remaining alive in 2025).

  • 24 million Americans on Social Security as primary source of income.

  • 1 million in assisted living.

  • 4.5 million who receive some kind of professional in-home care.

  • 54 million who rely on Medicare.

  • $200,000: Average savings of retired Americans

  • $4,000: Average monthly income of retired Americans

  • 49: Average age of people caring for a parent

    
    

If your eyes just glazed over through those numbers, no worries. In future pieces, I will be doing deep dives into the impact and the humanity of many of these statistics (and others). What you should understand for now is that this is dynamic has a huge impact on our society: how your tax dollars are spent, how people vote, how your friends and neighbors live their lives, and the well-being of people across every generation and most economic and social classes.

And as I started speaking to my mom’s friends, this is what really struck me - not just the size of the problem but the diversity of the problem. Just like no two people or two families are the same, neither are the experiences of any two care-givers. There are so many variables at play that every situation is uniquely challenging. 

Some, like Kathy, may be fortunate in that their parent has plenty of money set aside to support their needs but face the struggle of caring for them alone without the support and comfort of siblings. Other families care for their parents as a team - and even find the experience to be a bonding one - but instead end up shouldering a financial burden. There is certainly no shortage of family psychology at play in any of these circumstances. Childhood grudges and resentments are laid bare. People show never-before-seen sides of themselves. Some siblings rise to the challenge, and others don’t. 

And then there are the parents. No one ages the same, and each option seems to come with its own heartbreak. Is it harder to watch a loved one lose their memory or mobility? Will dementia make your parents forgetful but carefree or spiteful and bitter? Will they be willing to graciously accept your help or will they fight you every step of the way?

Finally, there is the tremendous variety of new problems that may arise in different combinations depending on these aging factors. It’s a cruel exercise to create an exhaustive list, so I will take a few broad strokes.

• Sickness and health challenges, accessing medical care, managing personal  hygiene and nutrition

• Closely related, but distinct are mental health issues, memory / acuity, depression, dealing with the loss of spouse and other close connections 

• Independence, mobility, dignity, freedom - including practical issues like losing the ability to drive or participate in favorite activities 

• Retirement planning, budgeting, managing expenses (often complicated by medical care)

• Elder abuse 

• Family dynamics 

• End of life planning

All this to say, it can be hard for even two care-givers to relate to one another. Karen’s experience of driving hours each week to help her dad keep on top of bills and maintain the house despite his temper, secretive nature, and frustration with losing his image of himself as a sharp man of means is really nothing like Diane’s experience of remodeling her downstairs so that her mother - who could no longer physically or financially support herself - was able to safely move in. How can we hope to help so many people who need so many different kinds of help? 

Maybe it’s because I’ve always been interested in personal finance, or because my professional background is in financial technology, but I noticed three things pretty quickly.

1. All of the problems I listed above have an underlying financial component to them.

   1. Medical or other care comes at a huge cost and can derail an otherwise well-planned retirement

   2. Alzheimers, dementia, and related diseases often quickly raise hard questions about who gets to make financial decisions on behalf of a parent

   3. The death of a spouse may force the survivor to pay attention to their finances for the first time in 60 or more years

   4. Elders are disproportionately the victims of financial crimes

   5. Talking about money is often taboo in families and this is only intensified when an uncomfortable topic like the cost of assisted living or estate planning is on the line

2. There is a vast body of information online to guide care-givers through dealing with physical and medical aspects of care, but a striking dearth of resources available to guide one through financial issues

3. The finance-focused resources that are out there mostly focus on two areas:

   1. Retirement / Estate planning - They totally ignore the poorly defined, unknown time between where things can get especially complicated. There is an entire industry built around this and thousands of financial advisors who make a living from it. I don’t fault them - this is important work - but I do think that it ignores the years of difficulty that care-givers and their families may be facing between enjoying retirement and a parent’s passing.

   2. Financial crimes - Banks have a vested interest (and are required in many ways) in educating their customers about these issues. Again, this is a case of positively aligned incentives but only addresses one aspect of the problem.

      
      

So, this is why I am introducing Ration Financial: a project dedicated to 

• Creating, centralizing, and distributing financial education resources specific to the needs of care-givers, their families, and -of course - those they care for

• Creating a community where care-givers can connect to support and learn from one another

• Sharing the stories of care-givers and their families to promote awareness of the critical role that financial literacy plays in family stability

• Giving families the tools to help them have difficult - but critically important - conversations about their finances early so they can put plans in place to help them avoid many of the hardships discussed here

  
  

Over the coming months and beyond, I will be digging into the dark corners of the finances of care-giving. To do so, I need YOUR HELP. Are you / were you (or someone you know) a care-giver? Maybe you have helped people with retirement planning? Have you or a loved one been the victim of financial fraud? Please contact me - I want to tell your story!