Family Caregiving: State of the Art, Future Trends March 6, 2007

1. Family Caregiving: State of the Art, Future Trends March 6, 2007 Cindy Hounsell, President Women’s Institute for a Secure Retirement

2. Basic Needs of Retirees 1. Income 2. Medical Coverage & Prescription Drugs 3. Long-term Care Sources of Retirement Income (The 5-legged stool) 1. Social Security 2. Pensions 3. Savings/Investments 4. Earnings from work 5. SSI (Supplemental Security Income) I. Retirement Needs and Sources of Income Women’s Institute for a Secure Retirement

3. Women Need More Retirement Income • Women live longer. • Women are more likely to need long-term institutional care. • Women are more likely than men to be single and not remarry. • 23.6% of women age 65 and over, who are alone, live below the poverty level. • Because of the need for income, women are less likely to be able to afford to leave the work force. Women’s Institute for a Secure Retirement

4. Risks of Retirement • Longevity, outliving assets and changes in family structure. • Unexpected health care needs and costs; • Loss of ability to live independently; and • Lack of available facilities or caregivers. Women’s Institute for a Secure Retirement

5. Caregivers Face Poverty Risk • When women assume caregiver roles, they are 2.5 times more likely to end up living in poverty. • Single women caregivers were 4 times more likely to live in poverty. • Nearly half were more likely to rely on SSI when they were older. Women’s Institute for a Secure Retirement

6. Costs of Caregiving Obvious examples include: • Loss of salary and benefits. • Loss of pay due to working part-time or reducing hours. • Loss of promotional opportunities that require more hours. • Loss of training opportunities that require travel. Women’s Institute for a Secure Retirement

7. Costs of Caregiving Less obvious examples of caregiving costs: • Reduction in savings and investments. • Lost opportunities for compound returns or 401(k) matching contributions. • An inability to finance home improvements that could increase the resale value of a home. Women’s Institute for a Secure Retirement

8. Leaving Your Job or Working Part-time If you plan to leave your job or reduce hours to take over caregiving responsibilities: • Will you receive less from Social Security? Social Security uses your best 35 years of work to calculate your benefit; zeros are added for fewer years. • How will leaving affect your retirement plan? Are you “vested” – usually takes 3-6 years to be vested? Women’s Institute for a Secure Retirement

9. Leaving Your Jobcontinued • Do you have disability insurance and health insurance if you are hurt or become ill? • Consider how difficult it may be to re-enter the workforce. Women’s Institute for a Secure Retirement

10. Money MistakesWomen Caregivers Make • Not making your finances a priority. • Using your money for everyday expenses, such as purchases at the grocery and drugstore. • Trying to pay for everything when you really can’t afford it….look for help. • Not realizing you may end up living on your own some day. • Not saving for retirement because you are busy helping everyone else first – children and grandchildren. Women’s Institute for a Secure Retirement

11. Talk to siblings about the costs of caregiving • Talk to your siblings/family members about the costs of caregiving. • Consider asking them to help with those costs and/or to pay you as an independent contractor so you can contribute to an IRA or SEP-IRA. • Check your Social Security statement. Figure out how much additional income you will need. • Find an on-line calculator to help you calculate how much you need to save at www.wiserwomen.org. Women’s Institute for a Secure Retirement

12. Conclusion Directions for Policy • Integrated retirement policy– should include Social Security, employer retirement plans, savings, and long-term care. • Government needs to understand the limits on individual action. Women’s Institute for a Secure Retirement