November is National Family Caregiver Month: Here’s What Caregivers Need to Know About Retiring Early
Leisl L. Cording, CFP®
Senior Vice President & Financial Advisor
November is National Family Caregiver Month, an opportunity to honor the physical, mental and emotional effort that caregivers put into caring for a loved one every day. If you’re a family caregiver, know that your efforts are recognized and so very valuable. But also know that it’s important (and OK) to still tend to your own needs as well. Those in the “sandwich generation,” who are caring for both their children and a parent or parents at the same time, carry an especially heavy load.
Whether by choice or necessity, many caregivers may find themselves retiring early. If you’re a family caregiver and are considering exiting the workforce, here’s what to consider to make sure you and your family are supported as well.
1. Understand Your Resources as a Family Caregiver
When faced with the responsibility of becoming a full-time caregiver, you might think that your only option is to leave the workforce. But there are a few other resources available that may be useful in your situation.
The Family Medical Leave Act allows for “eligible employees of covered employers to take unpaid, job-protected leave for specified family and medical reasons.”1 Check with your company if they offer this coverage.
You may also be eligible to receive payment from Medicaid for the care you provide to your loved one in your or their home. This Medicaid benefit differs by state, so contact your state’s Medicaid program to see if you or your loved one qualify.2
2. Have an Income Plan
Planning for retirement takes careful strategizing and becoming a caregiver adds a new wrinkle. By retiring early, you may miss out on ongoing contributions to an employer-sponsored retirement plan. In addition, you may not have access to Social Security, Medicare or pensions yet. You may also be hit with withdrawal penalties if you want to access your retirement funds early.
However, even with these additional complications, it’s still possible to prepare ahead for any income gaps. Working with a qualified retirement planning financial professional is key to making this transition a smooth one.
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3. Consider Your Own Future
Every caregiving situation is different and it’s important to consider both your short-term and long-term goals. Do you plan to take on a part-time job if you have the time and capacity? Do you want to re-enter the workforce? Are there other options available so you can still work while your loved one is taken care of? Having a clear sense of what you want for yourself can help you plan for your financial situation in the coming years.
4. Plan for the Emotional Changes of Being a Caregiver, Too
While it’s important to plan for the financial changes of becoming a caregiver, it’s important to consider the emotional changes as well. Being a caregiver can be hugely rewarding, but it can also take a toll on your mental health.
Consider ways to maintain your connections to your community while being out of the workforce. This could include joining a support group with other caregivers, picking up a new hobby or making time to connect with friends and family more often. There are also some programs that offer respite care, meaning that they will care for your loved one for a short time while you get a much-needed break. In addition, seeing a mental health professional that specializes in working with caregivers may be helpful. You don’t need to trade your own mental health for the health of your loved one. A healthy, happy caregiver is a confident caregiver.
You’ve Got This – and We’ve Got You.
There’s a lot to consider when becoming a caregiver, especially if you plan to retire early to focus on your new role. Be sure to consider all your available resources to help close any income gap and account for the financial and emotional changes you’ll likely undergo, from income planning to finding a support system. And remember, your financial professional should be there to help with life’s big transitions.
If there’s anything we can do to support you, please reach out to our team at Weiss, Hale & Zahansky Strategic Wealth Advisors. Our Plan Well, Invest Well, Live Well™ strategic process will not only provide you with a sound financial strategy, but our team will be there to help you through this and any other big life transitions that may come along, ensuring you’re maximizing your finances to their greatest potential and giving you the peace of mind you need to focus on other things. Contact us now to get started.
Presented by Senior Vice President, Financial Advisor, Leisl L. Cording CFP®. Securities and advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. These materials are general in nature and do not address your specific situation. For your specific investment needs, please discuss your individual circumstances with your financial advisor. Weiss, Hale & Zahansky Strategic Wealth Advisors does not provide tax or legal advice, and nothing in the accompanying pages should be construed as specific tax or legal advice. 697 Pomfret Street, Pomfret Center, CT 06259, 860.928.2341. http://www.whzwealth.com
1. https://www.dol.gov/agencies/whd/fmla
2.https://www.medicaid.gov/about-us/contact-us/contact-state-page.html