10 Tips on the Financial Matters of Caregiving - TIP #6: Manage Finances with Less Work Income

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About 6 in 10 family caregivers are also working at a paid job. It can be very difficult to put in both paid work hours and family caregiving hours - for some it's like having two full-time jobs. Many family caregivers make adjustments to their work, such as:

• Going in late or leaving early
• Taking time off
• Cutting back to part-time
• Taking a lower-paying job but less stressful job
• Becoming self-employed or doing consulting for more flexibility

Many caregivers have financial strains due to caregiving, but those who have stopped working are twice as likely to report financial strain.

If you are considering making changes to your work situation due to caregiving, keep the following things in mind in terms of potential impacts on your personal finances.

• Consider the impact on your contributions to Social Security and your future payments when you retire.
• Get clear about how your pension, 401K and other retirement savings will be impacted. 
• Think about how your long-term career will be impacted by the changes you make. 

For some caregivers, cutting back on hours or getting more flexible work arrangements still doesn't free up enough time for their caregiving responsibilities.

• 1 in 10 working caregivers has to quit working or retire early.

• On average people who stop working to care for family and friends lose about $300,000 in lifetime wages and benefits.

If your income is lowered due to making changes to your work situation because of caregiving, it's a good idea to:

• Meet with a financial coach, financial planner, financial advisor or another financial expert right away to work out a budget, set up an alternate plan for retirement savings, calculate what your retirement income will be if you stop saving, etc. You can also discuss the pros and cons of various financial moves, like cashing out a life insurance policy, getting income through home ownership via a reverse mortgage, housemates or a home equity line of credit, etc. Even if your income is very low, working with financial professionals can make a big difference, as they will likely think of options you hadn't considered. And creating a realistic budget gives you a framework to work from. Check out AARP's article: "How to Find a Trusted Financial Expert".
• Find out how much your Social Security benefits will be, and how they will be affected by changing your contributions now. 
• Find out if you or your loved ones are eligible for any benefits, such as veterans benefits, help paying utility bills and more. You can check out AARP's state benefits guides for more information. If any hours of care can be provided through Veterans Affairs or your local aging services providers that can also free up your time to work. Contact your local area agency on aging to ask about local home- and community-based services. 
• Find out if you can get paid to be your family member or friend's caregiver.  In some cases, if loved ones are enrolled in Medicaid you may be paid as their caregiver (it varies state to state). If they have long term care insurance, some policies do not stipulate who provides the care so you might be able to be paid. If your loved ones are veterans you might be paid for some of the VA programs. And those you care for have adequate private funds, they can always pay you to provide care. More information is in the AARP article, "Can I Get Paid to Be a Caregiver for a Family Member?"

I became an independent consultant in order to have more flexibility in my work when I stepped into intensive caregiving for my parents, and I dealt with severe effects on my personal finances. Looking back, the step I skipped was talking with a financial expert to help me protect my own finances. So I urge you to take that step - it can make all the difference. 

Take care,

Amy Goyer, AARP Family & Caregiving Expert

Author, Juggling Life, Work and Caregiving