Will caregiving expenses prevent you from saving for retirement?
Your concern for your parent or spouse’s well-being often means that you put their needs before your own retirement savings. Many adult children help their parents pay for in-home care, rent, or living expenses. When caring for a spouse, many rely on their joint savings.
But what does that mean for your future? How will you pay for your own care and living expenses if you don’t plan ahead and save for your own retirement?
4 tips to protect your retirement savings plan
We found a helpful article from Yahoo! Finance that explains the 4 most important ways for caregivers to protect their retirement funds even while caring for an older adult. We’ve summarized key points from the article here.
1. Ask the right questions
- Consider the types of care your senior will need, now and in the future.
- Understand their wishes – do they want to remain at home or would they prefer assisted living?
- If financial help will be needed, will the extra caregiving expense fit in your budget?
- If your budget doesn’t cover their financial needs, how can you re-prioritize your finances to cover the gap?
2. Plan ahead for employment changes
- Determine if you will need to reduce your work hours or take a leave of absence.
- Understand the trade-offs on top of the loss of income – decreased future social security benefits, delayed retirement, reduced retirement savings.
- Consider getting help from a financial planner to plan for the worst-case financial scenario.
3. Focus on your employer’s retirement plan if you’re returning to the workforce
- Consider maximizing your 401K contributions.
- Invest in an HSA or IRA if you don’t have a 401K or 403b.
- Adjust your current spending so you can focus on saving.
4. Leave emotions out of your decision-making
- The biggest mistake is to make emotionally-driven decisions.
- Make sure the financial sacrifices you’re making today won’t negatively affect your future.
By DailyCaring Editorial Team