Quitting your job to devote yourself to caring for a loved one may feel like the right thing to do, but it is an expensive sacrifice that could have a huge negative impact on your own retirement.
Gerontologist Sandra Timmermann, director of the MetLife Mature Market Institute, says that in addition to losing a paycheck, caregivers lose time in defined benefits pension plans, savings and matches in 401(k) funds, and they often reduce what they are entitled to in Social Security benefits.
Before making a full-time caregiving commitment, Timmermann suggests you take these steps.
- Make a budget. Add up how much you're spending now, including what you devote to caregiving expenses. Then figure out how much money you'll need and where it will come from after you become a full-time caregiver.
- Investigate the cost and availability of hiring help. You may be ahead on all fronts if you pay someone else to give care while you continue to work.
- Take advantage of government and veterans benefits. The website BenefitsCheckup.org will help you find programs that assist with all kinds of costs related to health care, housing and utilities, and food.
- Study up on Medicare and Medicaid. Understand the costs of premiums and deductibles and the programs available to help low-income recipients pay them.
- Seek out community resources. Meals on Wheels, adult day services and home modification help can make a big difference.
- Consider hiring a geriatric care manager. These experts will help you make decisions and can save you grief and money.
- Get legal help. If you are going to be a full-time caregiver, you need to have the ability to make legal, financial and medical decisions for the person you care for.
- Consider your own retirement planning. Make sure that you're not sacrificing your ability to live comfortably now and in the future.