Women’s Caregiving Patterns

Women remain the primary caregivers in our society, and they are spending a significant part of their adult lives providing it. Whenever a sick child, an ailing spouse or a parent requires care, it is most often the mother or the daughter who provides for it - even if that means leaving whatever she is doing at the time. In fact, according to a study by the National Alliance for Caregiving and AARP, among all family caregivers, 6 in 10 are women. However, among caregivers providing the most intense level of help to family members (more than 30 hours a week), 7 in 10 are women. Overall, women caregivers provide more hours of care and are more likely to make career changes in order to fulfill this role. 1

More than half of family caregivers report that their careers are adversely affected by this role. Women far more than men compromise their work schedules by moving in and out of the labor force, experiencing breaks in their work histories. According to the Social Security Administration, women workers retiring in 1998 at age 62 had on average 29 years of service credit for Social Security benefits while men had 38 years. 2

Caregiving is also a factor determining why more women work part-time. Research shows that because of the greater responsibility for caregiving, they are more likely than men to cut back on their hours of employment to meet family needs.3 About a quarter of working women with children worked part-time in 2003, compared to about four percent of working men with children.4 The consequences are serious; part-time employment is associated with lower wages, fewer opportunities for promotion and a lower likelihood of benefits.

A study by the National Alliance for Caregiving and AARP in 2004 also found that caregivers with the most intense level of responsibility (more than 30 hours each week) were the least likely to be employed full or part time and on average are spending more than $300 month on the person they provide care for.5 This financial burden can easily impact the caregiver’s ability to save for retirement.

African American and Hispanic caregivers are particularly hard hit by caregiving responsibilities. They are more likely to spend a greater percentage of their income on the person they care for and are more likely to report financial hardship than their white counterparts.6 These factors worsen the already precarious state of retirement savings among minority women.

Neither public nor private retirement programs grant credit for caregiving years in calculating retirement benefits; lost work years are factored in as zeros, which significantly reduce the final benefit amount. However, Social Security’s spousal and survivor benefits are designed to provide benefits to a spouse with a lower lifetime work history.

A study conducted by the National Center on Women and Aging for the MetLife Mature Market Institute found that caregivers lose $659,139 over a lifetime, the sum of reduced salary and reduced retirement benefits.7

Some of the financial consequences of women’s moving in and out of the workforce are obvious, such as losing out on pay increases, promotions, training opportunities and career advances. But there are more subtle consequences as well. These include lost opportunities for compounded returns on 401(k) matching contributions, a reduction in savings and investments and the inability to finance home improvements that can increase the resale value of a residence.8

Workplace benefits seldom provide support for dependent caregiving, and while federal legislation does require some employers to allow employees to take leave for caring for extended-family members, the option is viable only for those families whose budgets can accommodate unpaid leave.

Long-Term Care Needs

It is important for women to consider the consequences of their potential role as a future caregiver when determining their retirement income needs. Women’s ability to save for retirement and for long-term care needs is impacted by the fact that they take part-time jobs, take time off work or retire early in order to provide care for their family members. Women also supplement the living expenses of the non-spouse individual they provide care for and in doing so, reduce available funds for their own retirement savings.

In addition women are more likely than men to be receivers as well as dispensers of care because they live longer and are more prone to disability or chronic illness as they age. Many people do not realize that Medicare does not cover extended long-term care. While Medicare covers hospitals and physicians’ bills, it only provides very limited assistance for home health care and nursing home expenses, generally following a hospital stay.

If women can afford it, they can purchase long-term care insurance, which covers home health care and nursing home costs. As with other insurance policies, the premium costs rise with the age of the purchaser. The average premium for a three-year policy of long-term care coverage is $644 per year for ages 45-49, $911 for ages 55-59, $1,830 for ages 65-69, and $5,133 for ages 75+.9 Additional information about purchasing coverage can be found in WISER’s Special Report on Long-Term Care Insurance.

The National Family Caregiving Support Program, which was enacted under the Older Americans Act of 2000, provides state and local health care agencies with funds to create and sustain long-term care support services, such as training and support groups. Family caregivers can also find financial and retirement planning tools on WISER’s web site.

References

1 National Alliance for Caregiving and AARP, Caregiving in the U.S. Washington, D.C. 2004
2 Social Security Administration, Women and Social Security. Washington, D.C. 2001.
3 S. Jody Heymann. The Widening Gap—Why America’s Working Families Are in Jeopardy and What Can Be Done About It. Basic Books. 2000
4 U.S. Bureau of Labor Statistics, Employment Status of Population by Sec, Martial Status and Presence of Children Under 18, 2002-2003 Annual Averages, Washington D.C. 2004
5 National Alliance for Caregiving and AARP, Caregiving in the U.S., Washington, D.C. 2004
6 Ibid.
7 National Center on Women and Aging and the National Alliance for Caregivers. The MetLife Juggling Act. New York, NY. 1999
8 Ibid.
9 American Council of Life Insurers. Can Aging Baby Boomers Avoid the Nursing Home? Washington, D.C. March, 2000.