Navigating the High-Wire Balance: Caregiving Strategies for Retirement Savings

As states across the country implement paid leave laws, they are also expanding worker eligibility. For example, in Oregon, which recently launched its paid leave program, workers must have earned at least $1,000 in a year to qualify. They can then take up to 12 weeks of paid leave annually to care for a family member or chosen family, which can include anyone the worker considers to be a family member. While self-employed workers are not automatically covered, they have the option to opt into the program by making quarterly, income-based contributions. The maximum weekly benefit for Oregon’s paid leave program is $1,523.63.

According to Vicki Shabo, a senior fellow for paid leave policy and strategy at New America, caregiving expenses can be quite costly. On average, caregivers spend about $7,200 annually on caregiving, which accounts for 26% of their incomes. These expenses may include special food for an ill person, health supplements, or parking at a hospital. Therefore, every extra dollar earned through paid leave can help caregivers afford these necessities.

One challenge in states with paid leave programs is ensuring that workers, especially those with low wages, are aware of these programs. Jenya Cassidy, the director of the California Work and Family Coalition, explains that many people either haven’t heard of paid leave or assume it’s not applicable to them. Cassidy’s organization recently organized an informational round table where participants described themselves as providing care for others but didn’t identify as caregivers. This invisibility of caregiving in our culture creates a barrier to accessing paid leave benefits.

A 2020 AARP survey reveals that caregivers of adults tend to be older, with more than half being at least 50 years old. Additionally, six out of 10 caregivers are women. These caregivers are more likely to have less than $1,000 in savings and investments compared to non-caregivers. When they retire early, caregiving is often cited as a reason, rather than being able to afford to leave work, according to a 2023 report from the Employee Benefit Research Institute.

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