Why Canada’s caregivers say their retirement plans are being ‘decimated’

When Tracy Slaney imagined her life after retirement, she says she pictured travelling the world with her husband. But like many caregivers in Canada, the cost of looking after her loved ones means she had to put her plans on hold.

“Those retirement plans that I once had are gone. They are decimated,” she said.

In 2014, she became a caregiver for her father after he was diagnosed with terminal cancer. Within days of his passing, her mother received a dementia diagnosis. Slaney then stepped into a caregiver role for her until she died in 2019.

On Valentine’s Day 2020, she found her husband had been diagnosed with stage four colorectal cancer. She spent most of her time, energy and finances caring for him, until he passed away in April this year.

“I’ve been caregiving for 12 years, back-to-back,” she said.

Canada’s caregivers are feeling the squeeze financially, a new report by financial firm Edward Jones has found. More than seven in 10 Canadians who care for loved ones over the age of 65 are also financial caregivers, spending thousands of dollars on the care.

These caregivers say they “may reduce or stop their savings or tap into their non-retirement savings,” the report says.

“They may also reduce retirement contributions, and some even borrow from or draw on their retirement accounts,” it adds.

More than nine in 10 said they’re spending their own money, out of pocket, to care for their loved ones, said Tracey McLennan, a director and financial planner at Edward Jones and a caregiver.

“Even more compelling is about 83 per cent of them are telling us that they have at least one impact on their lifestyle. They’re either moving, they’re relocating those that they’re caring for, they are changing their own expenses, they’re impacting their lifestyle,” she said.

More than half (54 per cent) of caregivers surveyed said are “sandwiched” between two generations, meaning they have children they are supporting in addition to caring for another loved one.

Most often (63 per cent of the time), the recipient of the care is a parent. But they can also be grandparents (10 per cent), spouses (nine per cent), parents-in-law (nine per cent) or a friend, sibling or other relative (nine per cent).

In cases when the recipient of the care cannot reimburse the caregiver, they end up spending an average of $10,190 a year.

Even with health insurance, the costs add up, Slaney said.

“There were drugs that were not covered, even with an insurance plan. There were medical supplies that were not covered. There’s travel cost. We had to have a care support worker at times when I couldn’t be there. That is expensive,” she said.

Slaney was 38 when her father was diagnosed with cancer and the decade that followed saw her pass up promotions, miss time at work and spend time with her loved ones who needed care.

“I was in the prime of my career at that point,” she said.

“We’ve lost basically everything. We had two cars, we had the savings, we had everything. Unfortunately, no one is prepared for that type of scenario – to go down to one income, as well as take time off work myself,” Slaney added.

Canadians who take time off work to care for loved ones “get punished twice” for it, said Liv Mendelsohn, CEO of the Canadian Centre for Caregiving Excellence.

“You get punished for leaving the workforce, you miss out on advancement, but you get punish come time to collect your CPP (Canada Pension Plan) because you haven’t paid in at the full capacity that you would have,” she said.

Slaney has felt the cascading effects of the financial loss.

“Over the course of the last six years, we have lost over $100,000 in earnings, savings, RRSPs. Everything is gone in the caregiving journey,” she said.

Those who are caring for younger family members between the ages of 18 to 64 have to be caregivers for much longer, McLennan said.

“They are more likely to put in their own financial resources, and it is much more likely to impact their health physically,” she said.

Caregivers are also ageing as they spend money, time and energy caring for someone else. The average age of the caregiver is 49, with the average caregiving tenure lasting seven years, the Edward Jones report said.

This is typically the age when many Canadians hit their peak earning years, and when financial experts say when you should be saving aggressively. For many, this is also when they have to ramp up spending on sending their kids to college.

According to the Canadian Centre for Caregiving Excellence, one in five caregivers is already over the age of 65.

“We’re seeing more and more caregivers who themselves are one fall or one hospital visit away from needing care,” Mendelsohn said.

“If mom is looking after dad and mom has a fall, then their children, if they have children, are immediately thrust into a double caregiving role.”

The “sandwich generation” is turning into a “club sandwich” in Canada, said Laura Tamblyn Watts, CEO of the nonprofit advocacy group CanAge.

“We don’t just have a sandwich generation anymore. We’ve got a club sandwich,” she said.

“Someone who is 90 might be receiving care from someone who’s 68 and still working full-time. While the 68-year-old next door is receiving care from younger family members,” Watts added.

Nearly half (49 per cent) of caregivers surveyed for Edward Jones found that their own health was being negatively affected as they cut back on expenses for their own medical care.

Money is a hard subject to talk about when a loved one is dealing with a debilitating illness, Mendelsohn said.

“People feel terrible guilt when they’re making those choices between putting food on the table for their family and caring for dad in the way that they want to,” she said.

But getting past the initial awkwardness can help in the long term, McLennan said.

“There’s certain taboo topics that we were told don’t talk about around the dinner table. We don’t about death. We don’t talk about money,” she said.

Asking your parents about how they want to age and making sure you speak with your siblings about responsibilities ahead of time can help, she said.

“We have to have a conversation about roles. We know from this study that typically, caregiving falls on one individual, and quite frequently it falls on a female in the family,” McLennan said.

Having a caregiving role thrust on you doesn’t have to mean your plans have to be abandoned entirely, McLennan said.

“It doesn’t mean giving up all your plans, but it may mean amending them,” she said, adding that this could include working with a financial planner to figure out what your trade-offs could be and how you can keep squirreling money away into your RRSP.

Once Slaney retires from her government job in five years, she won’t have her husband by her side. But she hopes to still travel with her two children.

When asked what her top three bucket list destinations are, she doesn’t miss a beat when she says, “Hawaii. Hawaii. Hawaii.”

“That was on my husband’s bucket list, and we are going to fulfill that wish,” she says.