A poll of women who left work to care for a family member shows that half are concerned about the effect it will have on their retirement savings. Unlike previous generations, Millennials are saving extra money to make up for what they are unable to earn while they were on leave.
In a study released by the LIMRA Secure Retirement Institute earlier this week, half of the American women surveyed said they were worried their retirement security will suffer because they took a leave from work so they could care for a family member.
Most often women took leave in order to care for children (35%), which is not surprising since 7 in 10 mothers in the United States with children under 18 work outside the home. LIMRA says that 55% of Millennial caregivers set aside extra money to make up for their leaves while only 21% of Baby Boomers report having done so.
Overall, 40% of working women proactively compensated for time away from work to care for a family member. Asked what steps they took to offset their leave (respondents could select multiple answers), 19% saved additional money in a non-workplace savings plan or account, 15% increased workplace retirement savings rate prior to or following their leave, and 15% increased their partners' workplace retirement savings rate before or after taking leave.
“As our population ages (1 in 4 Americans will be over age 60 by 2030), the demand for caregiving will increase and if history is any indication, much of this will fall on women,” says Cecilia Shiner, assistant research director at the LIMRA Secure Retirement Institute. “The MetLife Mature Market Institute estimates that the cost in lost wages and Social Security benefits could be as high as $324,044 for women in their 50s who had to stop working. It is important that we educate women on ways they can mitigate the loss of income – and therefore retirement savings – that occurs if they have to stop working to provide caregiving.”