Retirement Roadblock: Caring for Family

By Leslie Haggin Geary
Bankrate.com

Staying home or cutting back hours to raise children or to tend to an aging parent is a loving and noble thing to do. But it's also expensive.

It's not only income you're losing. Retirement benefits -- from employer-sponsored savings to Social Security -- take a hit as well. If you're married, a working spouse must work extra hard to make up funding gaps, while an at-home spouse puts his or her financial future at the mercy of others. At the same time, you may be digging deeper into your wallet to cover health care costs and other expenses.

What to do? No one can or should tell you what's best for you or your family. But it's imperative to make a fully informed choice that considers the financial ramifications of caring for children full time or taking on the responsibility of looking after an older relative, says Cindy Hounsell, executive director of the Women's Institute for a Secure Retirement.

"I understand there are emotional reasons, but you have to understand you're making a serious, life-defining decision, too," says Hounsell.

First, here are some statistics to mull over. Median income in a household where someone is caring for an older parent or an individual over age 18 is slightly more than $37,300. That's far lower than the $42,400 median for households without a caregiver, research by AARP and the National Alliance for Caregiving shows.