MINNEAPOLIS – March 20, 2017 – A new study from Allianz Life Insurance Company of North America (Allianz Life®) revealed that elder financial abuse has a profound financial impact on the caregivers of those who are victimized. According to the updated Safeguarding Our Seniors Study,* nearly 90% of both active and potential caregivers said they experienced a financial impact when their elder was financially abused, with the average cost to those caregivers reaching a staggering $36,000. In addition, those providing care for past victims are spending significantly more than those caring for elders with no history of financial abuse, which in turn is negatively impacting the caregivers’ ability to save for their own retirements.
The 2016 Safeguarding Our Seniors Study expanded on a previous Allianz Life elder financial abuse study by surveying 1,000 active and potential caregivers.** This new study showed that the topic is complex, multi-layered, and evolving, with abuse affecting caregivers, not just the victims themselves.
The study found that the average caregiver spends more than $7,000 per year and provides more than 10 hours per week in noncash support (driving to appointments, delivering meals, social engagement, etc.). Less than half of current caregivers receive some form of financial assistance for that support.
Unfortunately, these costs are exacerbated when the elder in question has been a victim of financial abuse. Caregivers for past victims reported spending nearly $8,400 each year in direct cash and noncash support – 56% higher than the roughly $5,400 spent by those caring for elders with no history of financial abuse. Furthermore, in cases where the elder is a past victim, the need for those elders to receive some sort of direct financial assistance from their caregiver is more than double that of situations where financial abuse has not occurred.
“As America’s population ages, more people will be caregivers,” said Allianz Life President and CEO Walter White. “Unfortunately, these caregivers will be at risk of experiencing the negative effects of elder financial abuse perpetrated against the person they’re caring for. While a focus on protecting seniors from financial exploitation is vital, we also need to provide resources to caregivers who increasingly will become collateral victims of the elder abuse.”
Detriment to Retirement Planning
Two-thirds of active caregivers said the cost of providing care is having a significant effect on their finances, and they worry about having enough money to retire. Once again, when elder financial abuse occurs, that anxiety is even greater. Nearly 80% of caregivers responsible for a past victim indicated concern about the effect caregiving is having on both their current finances and their retirement savings.
In addition, this financial stress has created a moral gray area that many caregivers are constantly struggling to reconcile. Although the majority (81%) of current caregivers agree that it’s okay to accept some of the elder’s money to cover expenses, if offered, significantly fewer (66%) agree that it’s okay for a caregiver to reimburse themselves for any expenses without informing the elder every time.
Advocating the Role of the Financial Professional
Seven in 10 caregivers are currently talking to their elder about financial abuse and scams, but many feel these discussions are challenging. As a result, they are hesitant to have frequent conversations for a variety of reasons, including the belief that it’s none of their business, feeling that the elder is capable of managing their own finances, or belief that it makes the elder uncomfortable.
The majority of active and potential caregivers (58%) agree that a professional third party could help make these conversations easier, especially if past elder financial abuse has occurred. More than three-quarters (77%) of people caring for past financial abuse victims would welcome the assistance of third-party professionals versus less than half of caregivers (43%) where the elder was not a victim.
“We continue to advocate the involvement of a third party in financial management – another family member or experienced financial professional – as a simple first step in building a system of checks and balances that can help prevent financial exploitation before it starts,” added White.
Committed to Finding a Solution
As a company, Allianz Life partners with community organizations to deploy its employee volunteers in the community to raise awareness of elder financial abuse. Working together with the Better Business Bureau, Allianz Life created the Safeguarding Our Seniors volunteer program that sends volunteers to senior or other community centers to educate and encourage discussion on the topic. To date, volunteers have made more than 70 presentations in and around the Twin Cities, reaching more than 1,000 seniors with valuable information about how they can protect themselves from financial abuse.
In addition to educating consumers about elder financial abuse, Allianz Life also developed a newCaregivers Readiness Guide to help financial professionals start conversations with their clients about the potential need of caregiving for oneself, one’s spouse or for an elder family member. The guide provides simple checklists to follow about medical decisions, necessary documents, and instructions, which can be captured and organized inside one simple folder. The new guide and a Preventing Elder Financial AbuseTip Sheet from the Better Business Bureau are both available for download here: Allianz Life preventing elder financial abuse.
* The 2016 Safeguarding Our Seniors Study was conducted in August 2016 with 1,000 panel respondents age 18-64 who are either actively providing care for a nonspousal elder age 65+, or could be in a position to provide such care within the next five years.
** Active caregivers are defined as currently providing care for an elder. Potential caregivers are defined as someone who could be in a position to provide care to an elder in the next five years. A caregiver is defined as someone who provides financial, emotional or social support to a family member or friend age 65+.