MINNEAPOLIS, MN, Feb. 5, 2019 /PRNewswire/ - As the population ages, the responsibility of caring for aging relatives is falling largely to next of kin. In fact, one in five (19%) American adults currently assists an older family member, according to a new Ipsos survey conducted on behalf of RBC Wealth Management- U.S. Specifically, 17 percent of respondents regularly help with chores, cooking, cleaning or traveling to appointments, 5 percent provide housing and 5 percent offer financial support.*
RBC collaborated with Ipsos to poll more than 2,000 Americans aged 35 and above on a range of issues related to their personal finances. The survey found that among those who provide financial support to an older relative, the average monthly contribution is $403. Twenty-two percent contribute $500-999 and 14 percent contribute more than $1,000.
"As lifespans increase, and as the cost of health care reaches new heights, many adults are shouldering the responsibility of ongoing support for their family members," said Angie O'Leary, Head of Wealth Planning at RBC Wealth Management – U.S. "It's important for individuals to have a financial plan in place so they can help care for their relatives, while also preparing for their own financial future."
The Impact of Cognitive Decline
Among respondents who have a senior relative in their life, 10 percent say one they help care for has been diagnosed with some form of dementia, and another 9 percent say someone else in their family has been similarly diagnosed.
According to the Alzheimer's Association, 5.7 million Americans are living with Alzheimer's disease, a figure that is expected to reach 14 million by 2050. As cognitive decline becomes an increasingly significant part of Americans' lives, it is having a massive impact on families' finances, not only due to increased medical expenses but also because those with dementia may make financial missteps and are at increased risk for becoming targets of fraud and abuse.
Many of the survey respondents are experiencing these effects firsthand. Among those respondents with a senior family member, one in ten (11%) either knows or suspects that their loved one has been a victim of financial abuse. This figure rises to 30 percent among those with a family member they care for who has been diagnosed with dementia.
Of note, 45 percent of total respondents cite "being taken advantage of" as a concern for their own retirement.
While many Americans with a senior relative who has been diagnosed with dementia are aware of potential abuses, not all are equipped to address them. Twenty-eight percent of respondents in this group have taken formal steps with a financial institution or lawyer to protect their family member's finances in light of a diagnosis, and a similar proportion (29%) have taken some informal steps, while 43 percent have taken no steps at all.
"Only about half of the people we surveyed say they're familiar with the steps to take if they suspect an older relative has been a victim of abuse. Families are certainly doing their best in these situations, but the industry has a significant responsibility and role to play in protecting vulnerable populations," said Jen McGarry, who heads RBC's Client Risk Prevention division. "Our advisors are working closely with clients and their families to understand how cognitive disease can put them at risk, and to put safeguards in place to preserve their dignity and their assets."
Financial Demands from Above and Below
In addition to caring for aging family members, many Americans are also part of the "sandwich generation", supporting younger relatives as well. A fifth of all survey respondents (21%) say they have adult children (aged 18+) who they help support financially. This figure rises to 23 percent among the respondents who are mothers and 24 percent among parents between the ages of 35 and 54. Parents in higher-income households are most likely to be supporting adult children, at 25 percent.
Among those respondents providing financial support to adult children, the monthly contribution averages $445. For parents in high-income households, the figure is $681.
"While today's job market is strong, many young adults who entered the workforce in the wake of the Great Recession find themselves behind the income curve. Student debt is and will continue to be a crushing burden for Millennials, Gen Z and the generations to follow. Thus, many parents of adult children may feel obligated to help out financially, if they can," added O'Leary. "Every family needs to make the decisions that are best for them. I would encourage individuals to work with a professional to develop a plan that factors in support for loved ones without jeopardizing a comfortable retirement for themselves."
*Sums to 19 percent, as some help in more than one way.
About RBC Wealth Management – U.S.
In the United States, RBC Wealth Management operates as a division of RBC Capital Markets, LLC. Founded in 1909, RBC Capital Markets, LLC. is a member of the New York Stock Exchange, the Financial Industry Regulatory Authority, the Securities Investor Protection Corporation, and other major securities exchanges. RBC Wealth Management has $344 billion in total client assets with approximately 1,800 financial advisors operating in 200 locations in 42 states.
About the Study
These are some of the findings of an Ipsos poll conducted between October 11 and 16, 2018 on behalf of RBC Wealth Management. For this survey, a sample of 2,028 Americans aged 35+ was interviewed. Weighting was then employed to balance demographics to ensure that the sample's composition reflects that of the adult population according to Census data and to provide results intended to approximate the sample universe. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll is accurate to within ± 2.5 percentage points, 19 times out of 20, had all Americans aged 35+ been polled. The credibility interval will be wider among subsets of the population. All sample surveys and polls may be subject to other sources of error including, but not limited to, coverage error and measurement error.
SOURCE RBC Wealth Management - U.S.