Advertisement
Caregiving

Retiring to Become a Caregiver

Know your options and resources to help you in your new role.

Some workers retire early to take on a new job as caregiver. That was the case for Jennifer Cross, 59, of Minneapolis, who has been her 95-year-old mother’s caregiver for the past three years. Before that, Cross had been working in furniture sales and visiting her mother four or five days a week at the assisted-living facility where she lived. Neither of them liked the facility. So when Cross’s position was eliminated in 2016, she invited her mother to live with her and became a full-time caregiver. “I just figured I could do this,” she says. “I could take care of her, and that would be my job.” Her mother pays her for caregiving, and Cross also works part-time teaching yoga.

Caregivers often take a huge financial hit, which can have ramifications for their retirement security. A MetLife study estimated that the amount of lost wages and reductions in Social Security and pension benefits totaled $303,880 for the typical caregiver age 50 or older who left the workforce early to care for a parent.

Advertisement - Article continues below

“They put a lot at stake by leaving the workplace to be a caregiver,” says Quentara Costa, a certified financial planner in North Andover, Mass. Before you step into the role of caregiver, Costa says, hold a meeting with all other family members to discuss what you are willing and able to do, any compensation you might receive, and what help others will provide. The details can be written up in a family caregiver agreement so that there are no disputes—or hard feelings—later, she says. Families that wait until an elderly parent’s death to discuss how a caregiver is compensated can end up squabbling over the estate.

Before quitting your job, make sure you have worked long enough to vest in your pension or 401(k) and have accumulated enough credits to qualify for Social Security retirement benefits. Also talk with human resources, which can help you avoid leaving free money on the table by quitting too early. For example, you may need to work until a certain date to qualify for an annual bonus, 401(k) match or profit-sharing payout.

Caregiving is stressful so don’t overlook resources available to caregivers, including support groups and respite assistance to give you a break, says Amy Goyer, AARP’s family and caregiving expert. Check your local Area Agency on Aging (find agencies at eldercare.acl.gov) to learn about support programs. Organizations that target specific illnesses often provide caregiver support. For example, if you’re caring for someone who has Alzheimer’s, contact the Alzheimer’s Association, Goyer says. Information for caregivers is also available at aarp.org/caregiver and the Family Caregiver Alliance (caregiver.org).

Advertisement
Advertisement

Most Popular

11 Dividend-Paying Stocks You Should Think Twice About
dividend stocks

11 Dividend-Paying Stocks You Should Think Twice About

Dividend-paying stocks often can be a store of safety, but 2020 has been difficult on income equities. These 11 picks look like shaky plays despite th…
September 21, 2020
Medicare Basics: 11 Things You Need to Know
Medicare

Medicare Basics: 11 Things You Need to Know

There's Medicare Part A, Part B, Part D, medigap plans, Medicare Advantage plans and so on. We sort out the confusion about signing up for Medicare --…
September 16, 2020
Where You Should Invest Now
investing

Where You Should Invest Now

Kiplinger.com senior investing editor Kyle Woodley joins our Your Money's Worth podcast to answer investor questions about tech stocks, the election a…
September 22, 2020

Recommended

When Is Amazon Prime Day 2020?
spending

When Is Amazon Prime Day 2020?

Circumstances beyond its control have forced Amazon to move its annual Christmas-in-July Amazon Prime Day blowout sale in 2020 to ... later. Is Oct. …
September 22, 2020
HSA Limits and Minimums
health savings accounts

HSA Limits and Minimums

Annually adjusted contribution limits and other requirements must be met if you're covering health care costs with a Health Savings Account.
September 21, 2020
Don’t Be Paralyzed by Uncertainty
retirement planning

Don’t Be Paralyzed by Uncertainty

You definitely need a plan, because what’s ahead could be scarier than what’s behind us.
September 21, 2020
Insurance for Long-Term Care at Home
retirement

Insurance for Long-Term Care at Home

In the wake of COVID-wracked nursing homes, increasingly more people are looking at options to age in place with long-term care insurance.
September 17, 2020