Retirement & Financial Planning Report

People who must take over caregiving responsibilities for parents while still in their working years should consider a number of financial steps to protect themselves and in particular their own retirement, which may not be very far away by the time such caregiving needs arise, according to the MetLife Mature Market Institute.

Based on recent studies on the impact of financial impact of caregiving on the provider, particularly by those who cut back on their work or leave the workplace entirely, it warned that adult children should take care not to lose sight of their own financial needs. In addition to lost salary, there is also the potential to lose years of accumulated contributions and account growth in retirement savings plans or to build up benefits in defined benefit plans.

In addition, leaving the workforce can mean inferior job prospects on any potential return to work, since skills and professional connections will have eroded, it said. Further, there is a risk of injury or disability when out of the workforce that would not be compensable under an injury compensation program.

Make sure you know what benefits might be available so that you can continue to stay in the workplace if possible, it advises. These might include unpaid leave, flexible working schedules, and back-up dependent care. Meanwhile, examine the impact on employer-sponsored health and life insurance if you stop working.

It also suggests calculating in advance the potential costs of caregiving, and creating a budget for those you would be paying. This could lead to investigating applying for benefits such as community services through eldercare programs, as well as fully understanding what programs such as Medicare and Medicaid do and don’t provide.