Working Women: The cost of caregiving

Wednesday, August 12, 2015

Kathi had a full-time teaching job when her parents needed care. She found help through Council on Aging and the Butler County Elderly Services Program
Kathi had a full-time teaching job when her parents, Edna and Edwin needed care.  She found help through Council on Aging and the Butler County Elderly Services Program.

When he signed the Social Security Act on Aug. 14, 1935, President Franklin D. Roosevelt said, “We have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age.”

Now, 80 years later, millions of Americans receive Social Security benefits, and many rely on those benefits as a cornerstone of their retirement plan. But as any financial advisor will warn, Social Security benefits should be just one piece of your retirement plan.

This is especially true for working women who expect to provide care for a parent or spouse before they enter retirement. Increasingly, long-term care and financial planning experts are acknowledging – and warning about – the financial crisis that many female caregivers will face in retirement.

From 2000 to 2010, the number of women age 55 and older in the workforce grew from 6.4 million to 10.1 million. At the same time, women make up the backbone of our long-term care system, providing informal caregiving support to family or friends to the tune of $148-188 billion annually.

Sixty percent of all caregivers are women. The average caregiver is a 50-year-old woman – usually married and employed – who cares for her 77-year-old mother. (AARP, National Alliance for Caregiving). If this scenario continues for any length of time, something has to give. When other family and community supports are not available, many of these caregivers miss work, reduce their hours, quit their jobs, or retire early. This time out of the workforce often results in lost wages, health benefits, retirement savings, and Social Security earnings.

Data compiled by the Family Caregiver Alliance concluded that approximately 20 percent of all female workers in the United States are caregivers and caregiving responsibilities reduce paid work hours for middle aged women by about 41 percent.

How much do female workers stand to lose when they reduce their work hours or quit working altogether?

  • The negative impact on a caregiver’s retirement fund is approximately $40,000 more for women than it is for men.
  • For women the individual amount of lost wages due to leaving the labor force early and/or reduced hours of work because of caregiving responsibilities equals $142,693. 
  • The estimated impact of caregiving on lost Social Security benefits is $131,351.
  • Conservative estimates value pension losses for working female caregivers at $50,000.
  • In total, the cost impact of caregiving on the individual female caregiver in terms of lost wages, pension, and Social Security benefits equals $324,044. 

 Graphic: Lost wages and Social Security for female caregivers

(Source: Family Caregiver Alliance, MetLife)

But working caregivers – female and male – do have options. Experts urge workers who are serving in a caregiving role at home to talk to their human resources department about their situation before making the decision to leave a job. Job sharing, flexible work schedules, and the Family Medical Leave Act (FMLA) may be a few of the available options for caregivers who want or need to continue working.

Planning ahead is also important. If you anticipate being a caregiver – or needing care yourself – planning for long-term care needs and costs can save you money, give you greater control of your assets and resources, and improve the odds you’ll be able to live your life on your terms.

Finally, caregivers should connect with community organizations that may be able to provide support in the form of counseling, in-home care, respite care, adult day services, and more. Area Agencies on Aging are a good place to start.

Council on Aging is the Area Agency for Butler, Clermont, Clinton, Hamilton and Warren counties in southwestern Ohio. In addition to administering publicly-funded in-home care programs, COA offers free caregiver education and support, a call center that connects people to hundreds of local resources and programs, and unbiased advice and information to help people plan for their long-term care needs.

For caregivers and older adults who want to start planning for long-term care needs and costs, COA offers an Own Your Future Workshop. The workshop features local experts who provide facts and tools to help participants get started on their own long-term care plan. The next workshop is August 22 at the Sycamore Senior Center. Another workshop is planned for October at the West Chester Activity Center. Registration is required.