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.

“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).

Most Popular

Planning to Sell Your Home in Retirement? Downsize Costs Along With Space
Budgeting

Planning to Sell Your Home in Retirement? Downsize Costs Along With Space

In this hot real estate market, consider the costs of buying and selling a house along with the expenses associated with your new digs.
November 13, 2020
What Biden Will Do: 24 Policy Plays to Expect From the Next Administration
Politics

What Biden Will Do: 24 Policy Plays to Expect From the Next Administration

The Kiplinger Letter forecasts President-Elect Joe Biden’s biggest priorities -- and the likelihood of progress on them.
November 19, 2020
The 13 Best Healthcare Stocks to Buy for 2021
Kiplinger's Investing Outlook

The 13 Best Healthcare Stocks to Buy for 2021

Most of the best healthcare stocks for 2021 will have some sort of ties to COVID, whether it's producing a vaccine or cure, or benefiting from the vir…
November 20, 2020

Recommended

The Best T. Rowe Price Funds for 401(k) Retirement Savers
Kiplinger's Investing Outlook

The Best T. Rowe Price Funds for 401(k) Retirement Savers

A dozen T. Rowe Price mutual funds also have a place among the nation's most popular 401(k) retirement products. Find out which funds belong in your r…
November 27, 2020
The Best Fidelity Funds for 401(k) Retirement Savers
Investing for Income

The Best Fidelity Funds for 401(k) Retirement Savers

Fidelity funds are renowned for their managers' stock-picking prowess. We rate Fidelity's best actively managed funds that are popular in 401(k) plans…
November 27, 2020
The Best Vanguard Funds for 401(k) Retirement Savers
mutual funds

The Best Vanguard Funds for 401(k) Retirement Savers

Vanguard funds account for a third of the 100 most popular 401(k) retirement products. We rank Vanguard's best actively managed funds, including its t…
November 27, 2020
Bad News for Super Savers
Financial Planning

Bad News for Super Savers

Low inflation keeps thresholds on retirement savings plans in check.
November 25, 2020