Critter Corner: Caregivers and Planning for Retirement

Dear Bebe,

I stopped working full time when I was 45 to begin caregiving for my mother and it’s been fifteen years now. I have worked part time jobs here and there, but I have nothing that’s going to provide me any type of pension income (other than a small amount of Social Security income) when I completely stop working. I hope to completely retire some day, but I lost a lot of income by leaving the workforce so young, and my mother’s assets have all been mostly used up to pay for her needs over the years, so I’m not expecting any inheritance. I’m sure a lot of caregivers are in my position, trying to juggle responsibilities and save enough money while making ends meet. What tips can offer to people like me?


Rita Ire-Summdaye

Dear Rita,

Currently, more than 40 million people provide care for their parents, a sick spouse, a disabled child or an ailing friend. Most of us who help our loved ones also work for pay, and had to cut our hours significantly to have enough time for our caregiving tasks. The unexpected demands from caring for others can disrupt our work and careers and can often impede our ability to save for retirement.

Caregiving Poses Substantial Economic Risks for Caregivers

Caregivers often earn less than non-caregivers, in part because they get less attractive assignments at work and get fewer promotions. They also have to unexpectedly take time off, cut back on their regular work hours, or quit their jobs all together to juggle the dual demands from both paid work and caring for others.

Lower pay and fewer hours working obviously means that people have less money to save. Fewer hours and more frequent job switches make it harder for people to qualify for an employer’s retirement plan. And, caregivers’ incur additional costs as they often financially support care recipients.

Caregiving also frequently contributes to worse health outcomes such as back pain and depression. Those raise healthcare costs and make it harder for people to continue working.

Caregiving Can Last for Years, Impacting Finances

Caregiving is often more a marathon than a sprint. The longer it lasts, the worse the effects of caregiving are on caregivers’ finances. And, as more older households enter retirement with low savings, demands on family caregivers will rise.

Ways to Save for Retirement if You’re a Caregiver

Here are some ways that caregivers can save for retirement:

– Create a budget for you and your loved one. Look for ways to cut expenses and boost saving, even if it is just a little bit each month or each week. Tuck away what you can in your retirement plan.

– Don’t take on unmanageable debt for yourself. With your earning power cut as a caregiver, it may be very tempting to put expenses for a loved one or yourself on a credit card. If you do so, keep balances low.

– Look to community resources for help with lowering caregiving expenses. Look up your local Area Agency on Aging ( or call 2-1-1 to research services available in your area that could cut costs.

-Before leaving a full-time position, explore ways of working reduced hours or part-time hours with your employer. And keep an eye on your benefits. Will you lose benefits by leaving your job or changing your hours?

-Maintain and replenish emergency funds.

-Prioritize your own retirement savings. Keep contributing to your retirement accounts as a caregiver, even if it is just a small amount each month. If you dipped into a 401(k) or individual retirement account to pay for caregiving expenses, work on rebuilding your fund.

-Many caregivers take hardship withdrawals and loans from retirement accounts to cover gaps, but the penalties often are not worth the money. Unless you really don’t have other options, leave your own retirement savings alone.

-Plan for the long haul. Get the maximum out of retirement vesting from an employer and other benefits before leaving a job or cutting back hours. Set up an IRA and/or a Roth IRA and continue to contribute.

-Prepare now for your own aging. Make sure you have your own documents in place.

Retirement planners, such as Mr. Farr, work with people ages 55 and older, who are within 10-15 years or so of their desired retirement age. They know when you can afford to retire, how to coordinate your assets, how much you can withdraw from retirement savings (and from which accounts), how to manage expenses, and how to help you plan for catastrophic expenses such as long-term care. Learn more here.

Hope this is helpful,

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About Renee Eder

Renee Eder is the Director of Public Relations for the Farr Law Firm, and gives the voice to the Critters of Critter Corner. Renee’s poodle, Penny, is an official comfort dog who she and her children bring to visit with seniors who are in the early stages of dementia at a local senior home once a month.