Tag Archives: AARP

The Steep Price of Caring for a Loved One

How Caregiving Can Affect Your Retirement Plans

In the past year, about 43.5 million American adults worked as unpaid caregivers, the bulk of them to an adult age 50 or older, according to a joint study by the National Alliance for Caregiving and AARP. Among its findings, the report indicated that family caregivers spend 24.4 hours per week helping with activities of daily living (ADL), like eating, bathing, using the bathroom, or getting dressed, and that 38 percent of caregivers reported high emotional stress from the demands of caregiving.

Caregivers Providing Financial Support

Caregiving can require more than just helping sick relatives or loved ones with ADL activities. A previous National Alliance for Caregiving survey found that most caregivers spent an estimated $5,531 each year on out-of-pocket expenses for sick family members or for loved ones. At the time, survey respondents indicated that they stopped saving for their own future, deferred home improvement projects, and cut back on leisure activities to make ends meet.Financial-strain-on-caregivers_draft-2

Unfortunately, not much has changed in eight years.

The costs of caregiving can add up quickly. A 2014 Caring.com report stated that almost half (46 percent) of family caregivers spend more than $5,000 per year on caregiving expenses. Absorbing these financial costs are straining their own budgets. Only 28 percent of “sandwich-generation” adults supporting an aging parent and children say they’re living comfortably, while 11 percent say they don’t have enough to meet their own basic expenses, according to the Pew Research Center.

Caregivers Not Retirement Ready

In a TD Ameritrade survey, 22 percent of financial supporters said they have had to dip into their savings, and 14 percent have added to their own debt, which is already at an average of $22,000. A third have delayed saving for retirement. According to NBC News, if they have to help defray long-term care costs for their loved ones, only 56.5 percent of caregivers aged 60-64 say they are retirement ready. Among workers age 55 to 59, that retirement readiness is at 57 percent.

If you are a caregiver, here are some resources available to you:

United States Administration on Aging’s Eldercare Locator

National Family Caregiver Support Program

Gen X Struggling with Retirement Security

Generation X turns 50 this year and according to a survey by AARP, they may be more anxious about retirement than Baby Boomers. Gen X has been feeling the pinch for a while. They’ve seen the rise of 401(k)s replacing traditional pension plans and have the added burden of taking care of their children and aging parents. Even though Gen Xers have “more time” to plan, the biggest concern among them is not saving enough for retirement. The survey, High Anxiety: Gen X and Boomers Struggle with Stress, Savings and Security, looked at New York voters from age 35 to 69. And as the survey shows, anxiety is running high in Generation X: This lack of retirement confidence could stem from several reasons. In New York, 20 percent of working Gen Xers don’t have access to a workplace retirement savings plan. Because of this, 31 percent of Gen Xers without access aren’t confident they’ll ever retire. If their employer offered a plan, 80 percent stated they’d be likely to use it. But even out of those with access, 37 percent aren’t saving for retirement through a workplace plan. Many Gen Xers also cite their current expenses as an obstacle to saving for retirement:

  • 59 percent say they have no money left after paying for bills.
  • 56 percent are paying for their children’s education.
  • 44 percent have lost a job or taken a pay cut.
  • 44 percent have too much debt to pay off.
  • 37 percent are caring for an elderly parent or relative.

AARP Proposes State-Run Retirement Savings Program

In May, AARP reported on the findings of this survey at a retirement readiness event in Albany. “We know Boomers are worried, but the fact that Generation Xers are even more worried is cause for alarm and reflection,” said Beth Finkel, the state director of AARP in New York. “Since an uncertain financial future for New Yorkers is an uncertain financial future for the state, it is vital that these worries be addressed.” Americans are 15 times less likely to open a retirement savings plan on their own compared to if their employer offered one. To help address this and other concerns, AARP is calling for a state-sponsored retirement savings program. Deputy Comptroller Thomas Nitido represented NYSLRS at the event. He agreed that such an system could be useful, but workers would still face the challenge of finding extra money to put aside after paying bills. He also said that New York State Comptroller Thomas P. DiNapoli would prefer to see a federal solution to the retirement issue. However, that was “unlikely” given the political mood of the U.S. Congress.