- Caregivers have a median $68,000 saved in total household retirement accounts.
- 7 out of 10 gave little to no consideration to their finances before becoming a caregiver.
Looking after an elderly parent could cost you more than you expect: Your retirement security.
Those were the findings from a study of caregivers by the Transamerica Institute, a foundation that specializes in retirement and healthcare issues. Last March and April, the institute polled 3,074 individuals who provided nonprofessional or unpaid care for friends or family.
The adverse impact of caring for Mom and Dad go beyond the stress of day-to-day responsibilities.
About 3 in 10 caregivers who are also working have experienced adverse reactions from their employers because of their caregiving duties.
Meanwhile, their savings have suffered. Caregivers have a median of $68,000 saved in their retirement accounts.
"Caregiving responsibilities can impact a caregiver's finances, ranging from lost income due to time off the job to incurring out-of-pocket expenses on behalf of the care recipient," said Catherine Collinson, president of Transamerica Institute.
"Over time, it can negatively impact the caregiver's own future retirement," she said.
Here are the other ways caregiving can affect your finances, and how you can deal.
Trouble at work
Of caregivers who are employed, 76 percent have sought accommodations at work to help them balance their duties. Steps they've taken include using vacation and sick days, reducing hours or responsibilities, and quitting or retiring altogether.
Caregivers who take the drastic step of leaving their job experience a volley of financial shocks: They lose their primary source of income, miss out on participation in a 401(k), and they lose access to their employer's health insurance plan.
Further, these individuals are also incurring out-of-pocket costs. The study found that caregivers spend a median $150 per month to cover expenses for their loved one.
The work these people do goes largely unreimbursed: 75 percent of caregivers don't receive any payment or financial assistance for their duties.
What you can do
Consider these suggestions from Transamerica Institute to help you balance your personal finances as you care for an elderly parent.
Seek payment: Depending on the state that you live in and whether your loved one qualifies for Medicaid, you may be able to receive payment for assisting an elderly relative.
Be aware that the program is in flux: The Center for Medicaid & Medicare Services recently announced guidance for states that are considering Medicaid work requirements.
Further, some long-term care insurance policies allow payments to be made to family caregivers.
Don't quit: The Family and Medical Leave Act requires covered employers to grant 12 weeks of unpaid leave for qualified medical and family reasons. Work with your employer to see if you can take on flexible hours or telecommute in order to allow you to care for your loved one and remain employed.
Take care of yourself: As you care for your relative, be sure to watch your own finances. Continue to participate in your 401(k) at work and avoid pulling from those savings. Be sure to budget and track your expenses.
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