FCA Report Examines Effects of Caregiving on Retirement Planning
Nearly one quarter of American households provide care to relatives or friends age 50 or older. What is the fiscal toll on family caregivers who leave their jobs to provide that unpaid care? The question is addressed in a new policy brief released by FCA’s National Center on Caregiving.
According to the report, while long-term caregiving can tax the finances of any family, since ap-proximately 75 percent of caregivers are female, the economic effect is intensified for women. Women also provide “informal” (unpaid) care longer than men—in many cases, for more than five years.
The effects will be enormous for women of the Baby Boom generation, who are in the workforce more than any generation before, and who are now well into the age range in which long-term caregiving—whether for a parent, spouse or another relative—is a likely occurrence.
“All told,” the report states, “lower lifetime wages, workforce segregation and a greater proclivity to move in and out of the workforce raising children and caring for ill or disabled family and friends, severely impact women’s retirement income.”
The new policy brief explores:
- The reduced Social Security benefits based on reduced earnings;
- The limited access to employer-sponsored pensions;
- The effect of moving from full- to part-time work, or taking leave; and
- The reduction in personal savings.
The report also offers specific recommendations to policy-makers to ameliorate those effects, including changes in Social Security, the Family and Medical Leave Act, pension law, and dependent care tax credits.
Caregiving and Retirement Planning: What Happens to Family Caregivers Who Leave the Workforce was written by Laurie Young, Ph.D., Executive Director of the Older Women’s League, and Sandra Newman, M.P.H., Policy Specialist at Family Caregiver Alliance’s National Center on Caregiving. You can order the brief through our Publications Order Form. It is also available in print by sending $25.00 to Family Caregiver Alliance Publications, 785 Market St., Ste. 750, San Francisco, CA 94103.
The report is part of a series of publications on caregiving produced by the National Center on Caregiving at Family Caregiver Alliance and funded by the Archstone Foundation.