November is National Family Caregivers Month, a time to think about the millions of Americans who take care of others. This year’s theme is “take care to give care”, a reminder that the first rule of taking care of others is to take care of yourself first. In acknowledgment of National Family Caregivers Month, WISER is publishing a series of blogs examining caregiving and the ways women can take care of themselves by planning for its financial impact.
Adding the job of caregiving to an already busy schedule can be impossible without some sort of sacrifice, be it sleep, socialization, or relaxation time. For some, that sacrifice is work—upon becoming caregivers, many leave their jobs or reduce their hours and work part-time. For some, this is the best option, but it must be considered very carefully. Be sure to exhaust other options before taking this step because it can have a tremendous impact on your financial future. Leaving your job will not only cost you your salary, but also benefits like retirement contributions and health insurance. If you do have to leave your job or reduce your work hours, here are a few things to think about:
One important thing to consider before making any changes to your work schedule is where you are in the retirement and benefit schedule. If you are reducing your hours, find out the minimum number of hours you need to work to continue getting retirement benefits and health insurance, and try to work at least that much. Also try to stay at the job until you are vested, meaning you have worked long enough to have full ownership over the benefits you’ve received. Leaving your job before you are vested may mean forfeiting money that your employer has contributed to your account.
It is also important to think about your insurance when deciding whether to leave a job or work part-time. Will you be able to take your benefits with you when you leave your current job? If not, where will you get health insurance and how much will it cost? Get some estimates before making a final decision. Having health insurance is important and not a sacrifice you should make for caregiving. Under a federal law referred to as COBRA, you may be able to continue coverage under your former employer’s policy for 18 to 36 months, but you will have to pay the full premium. If you are over 65, you are eligible for Medicare. Another option is your state’s healthcare Marketplace, which was established by the Affordable Care Act. Visit healthcare.gov or call 1-800-318-2596 to apply and find out more about your plan options. The Marketplace will also tell you if you qualify for free or low-cost coverage available through Medicaid.
Also, consider how you will manage your money and continue saving toward retirement. Try to pay off credit cards and other debts so you are on stable financial footing before leaving your job. It is important also to create a budget to help you manage your funds and plan for any additional costs that might come from caregiving. WISER’s “Financial Steps for Caregivers” booklet has a great budget worksheet insert that can help you get started. Plan to continue saving for retirement, even if you are only able to save a small amount. If nothing else, resist the urge to spend any money you having in retirement savings accounts since that money can continue to earn interest, even if you are not working or contributing to it.
Finally, do not take on the entire responsibility for caregiving if you have other family members who can help either physically or financially. If you have to leave your job, consider talking with your family about receiving pay for the care you are giving. Remember most of all that you need to protect your own future while caring for others. Check out WISER’s “Financial Steps for Caregivers” booklet which includes lots of other great information and resources.