Caring for aging parents still typically falls on women. On Caregiver Appreciation Day, CKS Summit Group looks into the negative effect this is having on women in retirement.
Caring for an aging parent is a compassionate—but often stressful—undertaking. It can take a huge emotional toll on everyone in a family, but for women, who are far more likely to be caregivers vs. men, the financial impact can hit especially hard.
Emotional and Financial Toll
Despite its many rewards, including sharing love and developing inner strengths, caregiving can be overwhelming. Especially when caregivers expected to do this work for the short term and find themselves in for the long haul, self-care is often left out of the equation.
According to the Family Caregiver Alliance in San Francisco, more caregivers are hospitalized due to burnout and stress-related illness than due to worsening medical conditions. The reason is clear: Caregivers tend to put themselves last. What’s more, women who become caregivers for an elderly parent or friend are more than twice as likely to end up living in poverty than if they aren’t caregivers. If caregivers take time off work, not only do they lose pay, but also those lost wages can affect their Social Security, pension payouts, and other savings—threatening their future finances.
Sabotaging Retirement Plans
More women are living in multi-generational households than in years past, leaving financial advisors to help clients navigate the financial side of this growing demographic trend.
If you don’t make a solid retirement plan, caring for your parents could derail your own retirement plans, forcing you to lean on your children in your old age.
A study from the Bank of Montreal has found that the “sandwich generation” (parents of millennials and children of boomers) ages 45 to 65 have only saved an average 30% of what they expect to need for retirement—$291,297 versus their goal of $938,529. That’s not too surprising, given that they are caring both for their kids and their own parents.
To minimize the financial stress and anxiety during this difficult time in life, it is important to prepare early and have retirement plans in place…
How to Protect Yourself as a Female Caregiver
While family caregivers in America are diverse, an AARP Study says that the “typical” caregiver has the profile of a 49-year-old woman who takes care of a relative. Some caregivers provide at least 21 hours of unpaid care per week, and almost 25 percent of caregivers are now Millennials (between ages 18 and 34 years old).
While helping an aging loved one can easily become all-consuming, there are steps you can take to protect your finances and your retirement:
1. Prioritize Your Retirement Savings: For your kids, saving money for retirement ahead of saving for college is an easier decision to make, since college students have the opportunity to apply for aid and loans, while there are no such options available for retirees with inadequate savings. For your parents, prioritizing those retirement savings ahead of their care can be a very difficult and emotional decision to make. But women should use their parents’ assets for their care for as long as possible. This can help them avoid passing on a legacy of sandwich generation financial problems to them.
2. Insure Yourself: Women carers may want to consider taking out adequate disability and life insurance. According to the Council for Disability Awareness, nearly 1 in 4 workers will experience a disabling condition that puts them out of work for at least a year. If you have two generations counting on you and your income, such a disability could be a financial disaster. Disability income insurance can help make sure you’re able to carry on financially even if you become disabled.
3. Talk to Your Family: You need to know where your parents stand financially before they begin counting on you for care. Although it may be uncomfortable, it’s worth asking your parents what they have saved for retirement, whether they have life insurance, what plans they’ve made for their twilight years and who their financial representative is (if they use one). Another helpful conversation to have is with your parents, siblings and other relatives is to all decide together who will have power of attorney and who will assume the role of main/full-time caregiver should your parents need it.
4. Ask for Help: Taking care of the day-to-day needs of both children and elderly parents is quite a project even before finances enter the equation. Talking to a retirement income advisor can help you figure out the best course of action for reaching your retirement goals — while also affording your parents’ care and planning for your children’s future. Together, you can craft and implement a plan that can help protect everyone in your family.
Remember: You may be busy, but you don’t have to go it alone. Female carers feel more stress than any other age group as they balance the demanding, delicate acts of caring for growing children and their aging parents.
CKS Summit Group is here to help you make sense of the tough choices and help you figure out the best way to preserve your assets, help your parents enjoy their twilight years with dignity, and plan for your children’s future.
Find out more and contact us here today.