Caregiving: A Decision That May Impact Your Retirement Savings

Caregiving: A Decision That May Impact Your Retirement Savings

July 28, 2021

 

Many women have been a caregiver while raising children. Still, now many are caring for a loved one out of necessity as the older family member can no longer care for themselves. The Transamerica Center for Retirement Studies report, The Many Faces of Caregivers, indicates that 42% of Generation Xers and 42% of Baby Boomers care for a parent, and 57% of Individuals born before 1946 are currently caring for a spouse or loved one.

Care recipients suffer from a wide range of conditions, with half having a permanent one. The five most common conditions are arthritis, dementia/Alzheimer's disease, high blood pressure, diabetes, depression, and anxiety.

Caregivers help with a wide range of household chores, social and companion needs, health-related and personal care, and managing finances. Caregivers are also the bridge between Medicare or Medicaid services, and many learn medical and nursing tasks from professionals to better care for their loved ones. If you are a women caring for an adult family member (other than a spouse), discuss with your legal advisor what legal documents are required to represent that individual.

Where does that leave women caregivers when it comes to employment and saving for retirement? The report indicated that half of the caregivers have jobs, with many trying to maintain full-time employment. However, over 76% reported they have had to adjust their hours or plan to leave their jobs. Many in the survey expressed that they didn't consider the financial implications of becoming a caregiver. If you think you may be responsible for providing care for an adult family member, include this in your financial planning.

In the same way that a financial plan recommends reducing debt and saving more for retirement, a financial plan can show working year's savings and years of no savings and what that may mean for you. When you become a caregiver, not having to liquidate savings to provide care to someone will significantly impact your retirement.

If you think you may have to leave your job to provide care for a loved one, being debt-free is essential. Becoming a caregiver is a life-changing decision and remember to plan for yourself. Your financial plan may want to include life insurance with a long-term care insurance rider so that when you need care, you have the financial resources to provide it. Another option may be a permanent life insurance policy that insures you and accumulates cash value you can use to help fund your retirement. If you are considering becoming a caregiver or already are caring for someone else, contact your financial professional to help you plan for this phase of your life.

Important Disclosures:
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.
This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation.
This material contains only general descriptions and is not a solicitation to sell any insurance product or security, nor is it intended as any financial or tax advice. For information about specific insurance needs or situations, contact your insurance agent. This article is intended to assist in educating you about insurance generally and not to provide personal service. They may not take into account your personal characteristics such as budget, assets, risk tolerance, family situation or activities which may affect the type of insurance that would be right for you. In addition, state insurance laws and insurance underwriting rules may affect available coverage and its costs. Guarantees are based on the claims paying ability of the issuing company. If you need more information or would like personal advice you should consult an insurance professional. You may also visit your state’s insurance department for more information.
All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.
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