Data & Research September 21, 2016

Caregiving Women Make Efforts to Fill Retirement Savings Gap

Among other actions, they increased their workplace retirement savings rate prior to or following their leave.
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Half of working women who have taken leave to take care of a family member (parent, child, etc.) are worried about the impact their leave will have to their retirement security, according to a LIMRA Secure Retirement Institute study.

Forty percent of working women proactively compensated for gaps in their employment because they needed to leave their job to care for a family member. Actions they took included:

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  • Saved additional money in a non-workplace savings plan or account – 19%;
  • Increased workplace retirement savings rate prior to or following their leave – 15%;
  • Increased spouse/partner’s workplace retirement savings rate before or after taking leave – 14%; and
  • Other action – 1%.

However, the study found that more than half (55%) of caregiving Millennial women saved more money for retirement to make up for leaves and are more likely to have done so than older generations (38% of Gen X and 21% of Baby Boomers).

“As our population ages, 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, LIMRA Secure Retirement Institute. “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.”

The research is based on a May/June 2016 survey of 1,864 women who are household decision makers, ages 20 to 75, and working for pay.

Data & Research September 21, 2016

Families With Special Needs Children Not Prepared for Future

Most caregivers of special needs children don’t work with financial advisers; however there is strong interest in working with financial advisers who specialize in special needs planning.
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A survey of families with special needs children found that 30% of caregivers are not saving at all for their own retirement.

Caregivers are concerned about their own financial future and how their caregiving responsibilities may adversely impact their retirement. Most special needs caregivers will be caregivers for the duration of their lives—encompassing their entire retirement period—yet almost one-third of this group (30%) is not saving at all for retirement.

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Only 16% of caregivers strongly believe they are financially secure. Seventy percent believe they will have to compromise their own retirement plans in order to provide for their special needs dependent, and 77% are concerned they won’t be able to retire when they want to. Eighty percent of caregivers are concerned they won’t be able to maintain a comfortable lifestyle throughout retirement.

Most caregivers (63%) don’t work with a financial adviser; however there is strong interest in working with a financial adviser who specializes in special needs planning. Among those who do not have a financial adviser but want one, 98% would be somewhat or very interested in working with someone with expertise in special needs financial planning issues. Ninety percent of caregivers believe having an adviser who works for a company that has products and services for special needs households is important.

The survey also found almost nine in ten caregivers (87%) are concerned about what will happen to their special needs relative when they are no longer living. Fifty-nine percent have not even taken the basic step of preparing a will, and 60% of caregivers with life insurance have less than $300,000 of coverage and fewer than half have the protection of whole life coverage. However, the lifetime cost of caring for a dependent with autism is between $1.4 and $2.4 million. Only 23% of caregivers have a formal financial plan for their dependent, and only 37% work with a financial adviser.

The questionnaire for this study was designed by Greenwald & Associates in cooperation with The American College of Financial Services. Information for this study was gathered through interviews conducted between March 30 and April 12, 2016. Respondents were recruited through the Research Now online panel, and a total of 1,015 Americans were interviewed.

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