America’s unpaid caregivers are paying a significant financial price for supporting loved ones, with new research suggesting the responsibilities are making it harder to build savings, manage debt and retire with confidence.
A report released today by the Employee Benefit Research Institute (EBRI) and Greenwald Research found that nearly three in 10 Americans age 25 and older provided unpaid care to a child or adult over the past year. Those caregiving responsibilities are closely tied to weaker financial outcomes and greater concern about retirement.
Compared with non-caregivers, unpaid caregivers were more likely to have limited financial assets, higher debt levels and lower confidence that they will have enough money to live comfortably throughout retirement.
Thirty-four percent of caregivers reported having less than $10,000 in savings and investments, compared with 25% of non-caregivers. Meanwhile, 69% of caregivers said debt was a problem, versus 57% of those not providing unpaid care.
“Caregiving is often discussed as a family, health or workplace issue, but this research shows it is also an important retirement security issue,” Craig Copeland, director of wealth benefits research at EBRI, said in a statement.
The financial strain often extends beyond lost savings. Thirty-four percent of caregiving workers said they provide direct financial support to the person they care for, while one in five said they have taken on additional debt because of caregiving responsibilities.
The burden also appears to affect retirement planning across income levels. Among households earning less than $35,000 annually, 75% of caregivers lacked confidence they would have enough money for retirement, compared with 55% of non-caregivers. Even among households earning at least $75,000, caregivers were less confident about their retirement prospects (32% reported not being confident) than peers with similar incomes (23%).
Researchers also found caregiving can disrupt employment and overall well-being. Nearly two-thirds of caregiving workers said their responsibilities had negatively affected their mental health, while more than half said caregiving made it harder to save for emergencies or work the hours they wanted.
The findings come as more Gen X and Millennial Americans find themselves balancing careers while caring for both children and aging parents, increasing pressure on household finances.
Read more: Pre-retirees are concerned about long-term care, but paying the bills is not the main issue
The report highlights the growing need to incorporate caregiving into retirement planning discussions, particularly as clients face competing financial priorities. There are also opportunities for employers to better support caregivers through flexible work arrangements, caregiving resources and workplace benefits that can help reduce financial strain while allowing workers to continue saving for retirement.
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