When we plan for retirement, we often plan for the activities we imagine we’ll spend the most time doing: Travel, golf, gardening, seeing the grandkids, etc. But there’s one activity that many retirees don’t plan for that they will find themselves doing the most: Being a caregiver.
A caregiver is a family member who regularly looks after a sick, elderly, or disabled person. Millions of Americans work as unpaid caregivers in the United States. According to the Bureau of Labor Statistics, at least 15% of those providing eldercare are age 65 or older, and 21% are older than 55.[1] Many retirees unexpectedly find themselves thrust into the role of caregiver, either for a spouse, a sibling, a child/grandchild, or even their parents.
Most people want nothing more than to ensure their loved ones are safe, happy, and looked after. But being a caregiver – especially a full-time one – can be an enormous weight on your retirement. For one thing, it can be extremely costly, especially if the person you are caring for has major health issues or medical needs. That can drain much-needed retirement savings that were probably earmarked for other things.
It can also be an enormous demand on your time. Some retirees, expecting to finally take that trip to Europe or focus on volunteering, find themselves unable to be away from home for any length of time.
It can also have an effect on your own wellbeing. According to one study, 23% of caregivers “say that providing care has made their own health worse.”[2]
Now, none of this is to discourage you from being a caregiver, if that’s what your personal situation requires. Being a caregiver is a noble calling, and it can also be extremely rewarding! But it does require extensive planning to ensure that it doesn’t derail your retirement dreams or drain your retirement savings. Specifically, potential caregivers should take time to:
- Calculate expenses. As part of your retirement plan, factor in the potential costs of caregiving and make sure those costs can be covered.
- Inventory your resources. Your retirement plan should factor in any and all funds you have that can be allocated toward caregiving without interrupting your own personal retirement goals. This also involves researching whether there are any state or federal resources you can tap into. Take time to review your non-financial resources, too, like determining if there are other family members who can assist you with caregiving.
- Review your family’s insurance needs other than Medicare. Disability insurance, critical illness insurance, and even long-term care insurance can be very valuable for caregivers.
- Develop a budget. This can help keep caregiving costs from spiraling.
Being a caregiver may never be an issue for you, or at least not for a long time. But if you do need to function as a caregiver in retirement, it’s important to factor that possibility into your plan so that you can still live the lifestyle you want while doing the most important thing anyone can do: Care for the people you love.
[1] “Who is providing eldercare?” U.S. Bureau of Labor Statistics, https://www.bls.gov/blog/2023/celebrating-national-family-caregivers-month-with-bls-data.htm
[2] “The Impact of Caregiving on Retirement,” Caregiver Resource Centers, https://www.caregivercalifornia.org/2024/04/09/how-does-caregiving-impact-retirement-the-real-costs-of-caregiving/
