Yahoo Finance 2 Ways To Keep Caregiving From Upending Your Retirement Savings
Caregiving can be expensive. Consider 2021 AARP research, which found that approximately 80% of caregivers have “routine out-of-pocket expenses related to looking after their loved ones.” On average, AARP noted, those expenses come out to $7,242 a year.
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Given the financial strain many caregivers are under, it’s no surprise that a recent survey from Nationwide revealed that many people are worried about their ability to retire while caregiving.
1,334 adults in the United States 28 and older with household incomes of at least $75,000 were surveyed. Of those surveyed, 43% indicated that they “are afraid that caregiving expenses will keep them from ever retiring.”
In fact, the survey found that on average, caregivers “spend $338 per month on caregiving expenses.” On top of that, they might be bringing in less income. Specifically, 15% said they had to make career changes — taking on part-time work or getting a job that pays less — to gain the flexibility needed for caregiving. Additionally, 56% of those surveyed “said they are willing to take a loan from their retirement account to be a caregiver for someone in their family, straining their long-term finances.”
However, there are ways you can safeguard your retirement savings if you’re currently caregiving or might be doing so in the future. Key among them? Financial planning.
As Holly Snyder, the president of Nationwide’s Life Insurance business, was quoted as saying, “‘Americans would benefit from taking a more proactive approach to financial planning to ensure they are equipped to meet the needs of their loved ones and themselves as they age.'”
Snyder was also quoted as pointing out long-term care insurance as a solution. By encouraging your loved ones to explore long-term care insurance, they might be able to get some of their caregiving costs covered, and under certain policies, you might be able to get compensated for being a family caregiver.
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This article originally appeared on GOBankingRates.com: 2 Ways To Keep Caregiving From Upending Your Retirement Savings
