As the number of elderly individuals continues to rise, so does the financial burden associated with their ageing care.
Many millennials and Gen Xers are finding themselves in a difficult position — they must help their parents and grandparents with long-term care costs as government assistance often falls short.
According to a Business Insider story, this growing financial gap is forcing younger generations to shoulder more responsibility for their loved ones’ care, creating ripple effects that can impact their present and future financial well-being.
An example is Singaporean business owner Delane Lim, 38, who financially supports his parents, contributing a few thousand dollars monthly.
In a story published by The Straits Times (ST), Lim said he covers the salaries of two domestic helpers to care for his 65-year-old mother, who has dementia and gives his parents $1,600 for their monthly expenses.
According to an online survey of 1,000 people by ST, three out of four respondents reported regularly giving money to their parents.
Among those who do provide support, nearly half contribute between $300 and $500 per month on average. Additionally, about half of the respondents said they give 10 to 20 per cent of their salary.
According to the Top Faith Caregiver website, the cost of hiring a live-in caregiver in Singapore typically ranges from S$600 to 1,200 per month.
This amount generally covers room, board, and lodging, along with the caregiver’s salary and benefits. Premium care services may come at a higher cost, while more basic options could be more affordable.
The strain of caregiving on younger generations
A significant number of millennials and Gen Xers are finding themselves caught in the middle of caregiving duties for ageing parents while still managing the responsibilities of raising children.
This “sandwich generation” is often forced to leave jobs or reduce their work hours to care for elderly family members. This sacrifice, while out of love and necessity, has financial consequences.
Ms Melinda Ong, assistant vice-president of Financial Services at Manulife Advisory Group, said in an interview with The Straits Times that for “the sandwich generation, managing dual financial responsibilities can be a challenging and stressful balancing act.
Expenses vary from everyday costs like groceries and transportation to medical bills and long-term caregiving duties.”
Experts warn that this caregiving cycle can create a form of generational poverty. Marc Cohen, a professor of gerontology, explains that the financial strain isn’t just felt by one generation—it’s a communal issue that affects everyone involved.
As caregiving costs continue to rise due to inflation and a shortage of workers, the challenge becomes even more daunting, especially for families in the middle class.
The limits of government assistance and the need for policy change
For many families, relying on government programs like Medicare is not a viable solution.
While Medicare helps with some healthcare costs, it does not cover most long-term care services such as assisted living, home healthcare, or nursing homes.
Medicaid, on the other hand, offers limited coverage, and eligibility can be tricky to navigate.
Additionally, waiting lists for Medicaid services can be long, and even when families qualify, they may face eviction from assisted living facilities if their savings run out.
This scenario is becoming increasingly common. As older generations require more care, it is clear that government programs are not enough to handle the growing need.
Experts like Marc Cohen argue that there is a clear “market failure” in the private long-term care insurance sector, and policymakers must step in to create a public option that serves middle-income families.
Is a solution on the horizon?
As the financial burden of long-term care continues to escalate, some policymakers are beginning to explore solutions.
For instance, Washington State recently implemented a payroll tax to fund a new long-term care insurance program to provide care for those in need. This model could serve as a blueprint for other states and nationwide programs.
In Singapore, there is the Silver Support Scheme, which offers extra assistance to elderly Singaporeans who had low incomes during their working years and now face reduced financial resources in retirement.
Cohen advocates for a national public insurance option for long-term care that would function similarly to Social Security and Medicare, funded by mandatory taxes throughout one’s working life, with benefits collected upon retirement.
This would help alleviate the financial strain on families and ensure more people can access affordable care when needed.
As the population ages, the call for comprehensive, affordable solutions will only grow louder, making it clear that a policy change is desirable and essential.