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There are more family caregivers in the United States than you may realize. Tens of millions of Americans give unpaid care to a loved one each year (nearly 20% of the population). (AARP). As we age, our families and friends do too, increasing the odds of any or all of us needing assistance of some kind. As such, it likely comes as no surprise to learn that millions of family caregivers are also themselves of retirement age while providing care for a spouse or loved one. So in this article, we’re going to discuss this subsection of caregivers–the ones in or nearing retirement–to explore the impact of caregiving on their retirement plans and goals. Let’s dive in.

The Impact of Caregiving on Retirement

The need for a family caregiver is usually borne of circumstance. A diagnosis, treatment, acute injury, or chronic progression that worsens to the point that a loved one needs help to get through some part of their day.

As such, most of us don’t prepare for it. It tends to come as a surprise. Caregiving can be incredibly financially draining for anyone – but that statement is especially true for people with limited retirement funds or restricted income. 

Here are some of the statistics to consider:

  • Nearly 70% of caregivers provide some form of financial support for the loved one in their care. (Source)
  • 23% of caregivers say that providing care has made their own health worse.
  • 32% percent of family caregivers cease or reduce contributions to their retirement funds in the wake of caregiving, which Merrill Lynch calls an “indirect cost” of this role. (Source)
  • Nearly 60% of caregivers have to cut back on working hours or quit their jobs to provide care if they’re not yet retired. (Source)
  • Family caregivers are more likely to have higher levels of debt and lower levels of savings. (Source)

Summarizing the Stats

Caregiving can have devastating effects on retirement, from leaching away limited funds to forcing early retirement in order to accommodate its demands on time. There are a lot of costs associated with providing care, from food and transport to prescriptions and appointments that caregivers are often forced to cover for their loved one.

Steps to Take to Prepare for Retirement as a Caregiver

To prepare for a situation where you may need to be a caregiver ahead of or during retirement, here are some steps to take and questions to ponder.

  • Check in with your loved one to see what resources they have available already to help through caregiving. Consider things like savings, retirement funds, investments, assets, and insurance. It can be difficult to discuss financial matters with family and friends, but having this information in advance of needing it can make things a lot easier down the line.
  • Do they have any insurance beyond Medicare? Medicare doesn’t cover everything they may need (including professional or personal caregiving) so it’s important to understand this and prepare accordingly. They may need supplemental insurance to cover things like long-term care, hospitalization, short-term rehabilitation, disability, etc. 
  • Who is around and available to help? Consider things like power of attorney (who can make decisions when needed on someone else’s behalf), proximity, time constraints, and other responsibilities. 
  • What resources can you access at the state and federal level? Register for a free account through CareNav to start combing through what’s available to you in the state of California.
  • Can you work together to create a family budget? Take some time to assess the potential financial need (on both the conservative and higher ends of the spectrum) to plan for the future together, ensuring as much as possible that everyone has what they need to be well cared for.

Closing Thoughts

Family caregiving often catches retirees unaware, as no one wants to anticipate that they’ll need it. The reality, for most of us in the US, is that it’s more likely than not that we’ll need it at some point. It’s better to be prepared and not need it, than let it find you unprepared if you do.

Should you become a caregiver for the loved one in question, the California Caregiver Resource Centers are here to support you. We are a non-profit network of 11 Centers that support caregivers across the state of California. Every county in the state is covered.

Further Reading: Caring for the Caregiver: Navigating Mental Health Challenges

Caring for the Caregiver: Navigating Mental Health Challenges is an article dedicated to the well-documented difficulties the role of caregiver presents. 

Being a caregiver is a labor of love, but it’s not an easy path. The National Institute of Health (NIH) has uncovered some important insights into the mental health of caregivers, and it’s crucial to shed light on this subject. Click here to read the article.

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