SerpApi.Org
Serving as an unpaid caregiver for a child, partner, or older relative can exact a financial toll that can hinder retirement readiness, according to a new survey from the Employee Benefit Research Institute and Greenwald Research.
That poll, which surveyed 2,544 American adults age 25 or older in January, found that people in unpaid caregiving roles tend to be less affluent and in poorer health than those who don’t have a responsibility to support someone else. The survey defines unpaid caregivers as anyone who for the past year has had to support a child or adult in at least one daily activity for which they received no compensation. Nearly three in 10 respondents identified as an unpaid caregiver.
The researchers found that non-caregivers generally expressed greater confidence in their ability to retire comfortably than caregivers, particularly among the lowest-earning respondents. Among respondents with annual household incomes below $35,000, 75% said they aren’t confident that they will have enough money to live comfortably in retirement, compared with 55% of non-caregivers in the same income bracket. The survey found similar though smaller disparities in higher income brackets.
“Caregiving is often discussed as a family, health, or workplace issue, but this research shows it is also an important retirement-security issue,” says Craig Copeland, director of wealth benefits research at EBRI. “Caregivers are doing many of the same planning activities as non-caregivers, but they are more likely to face debt, lower assets, mental health strain, and lower confidence about their long-term financial future.”
The survey found that caregivers tend to have more debt and fewer financial assets than non-caregivers. Among caregivers, 53% said they have household incomes of $75,000 or higher, compared with 62% of non-caregivers. Just over one-third of caregivers said they have less than $10,000 in savings and investments, compared with 25% of non-caregivers.
That could be at least in part because many caregivers aren’t just donating time and emotional energy. Just over one-third of caregiving workers and 20% of caregivers who are retired said that they provide direct financial support to their care recipient or that they have taken on additional debt because of their caretaking role.
Health impacts. Although the survey focused on retirement readiness, it also flagged health disparities between caregivers and non-caregivers. For instance, 36% of caregivers rated their health status as very good or excellent, compared with 45% of non-caregivers who said the same.
Nearly two-thirds of caregiving workers said that their care responsibilities have had a negative effect on their mental health, and 52% of caregiving retirees said the same. “That pressure impacts work,” says Greenwald Research CEO Lisa Greenwald, who argues that employers should re-evaluate their benefit offerings in light of the mounting caregiving burden that many workers shoulder.
“Caregiving creates financial, health, and social-emotional pressure at different life stages and ages—while people are working, as they prepare for retirement, and after they retire,” she says. “For employers, this is an opportunity to better understand the realities facing employee caregivers and to consider benefits, workplace flexibility, leave, education, and support that can help workers remain productive, financially well, and better equipped to manage caregiving responsibilities while also saving for retirement.”
Write to [email protected]
