If you are a family caregiver, you may have worries about your retirement because so much of your time and money goes towards caring for your elderly loved one. You are certainly not the only family caregiver with these concerns; we are here to help you create a plan for your retirement future.

How Caregiving Affects Finances

Unfortunately, caregiving often takes a toll on the family caregiver’s responsibilities at work, which affects the amount of income coming into the household. The U.S. doesn’t consider family responsibilities to be a legitimate reason for missing work and offers no benefits to employees who take unpaid family leave.

According to the MetLife Study of Caregiving Costs to Working Caregivers, family caregivers suffer losses of roughly $300,000 due to lost wages, pension benefits, and Social Security benefits. The individual cost for women is greater than the cost for men by about $40,000.

Serving as the family caregiver is a rewarding experience, but it can put a financial strain on you and make caregiving more difficult. Caregiving is costly and can dominate your purchases, making saving up for retirement or future plans complicated.

Caregiving and Retirement

Studies show that caregiving affects both mental and physical health, regardless of the type of caregiving. Providing care for a spouse, elderly parent, or disabled family member influences the physical and mental health of the caregiver, often in a negative way.

According to the U.S. Health and Retirement Study, early or forced retirement because of spouse disability or caregiving duties has been proven to increase symptoms of depression in female caregivers. Family caregivers who retire early often feel their finances cannot sustain both caregiving and retirement and may even harbor resentment towards their family member for “spoiling” their retirement.

Things to Consider

When creating a financial retirement plan for yourself, there are important factors to consider. Think about your circumstances and responsibilities as you begin to plan for the future.

Consider the type of care your loved one requires and the resources available to you to provide quality care. Examine the physical and mental health of both you and your loved one to determine how long you can realistically serve as their caregiver before one or both of you needs medical assistance.

Finally, think about what matters most to you during your retirement. Your aging loved one is obviously a priority, but you can still enjoy yourself and accomplish important goals. Take your loved one’s needs into account as you plan a budget but think about yourself as well.

Plan for Retirement

Before you quit your job or minimize your hours, consider the financial impact this decision will have on you in the long run. It may seem easier now to retire early so you can provide full-time care to your loved one but doing so could cost you thousands of dollars in the future.

Research your options thoroughly before you walk away from a job with benefits and a 401(k). Speak with your manager or supervisor about your caregiving responsibilities and see if your employer is willing to be flexible.

Regardless of your decision to stay employed or retire early, you will need to create a budget for you and your loved one to save money. Create a savings goal every month and adopt other frugal habits to minimize your spending. This allows you to save leftover money in a health savings account that will accrue non-taxable interest over time.

Consider your loved one’s resources to see how much help you can count on. Check if your loved one applies for Medicare or do a reverse mortgage on their house to make extra income.

Contact Us

If you are the primary caregiver for an elderly loved one, you may experience financial hardships that affect your future retirement. Creating a retirement plan as a family caregiver is possible if you’re smart and thrifty. However, if your loved one needs more care than you can provide, be sure to contact a non-medical in-home caregiver.