Over sixty million Americans are caregivers — a 50% increase in the past decade and seven in ten are also employed, according to AARP. That’s a staggering number, and it’s reshaping the way we need to think about work, benefits, and financial wellness. A majority of Americans (54%) in the 40s — prime working years — are sandwiched between an aging parents and children, reports Pew. For HR leaders, these aren’t just statistics, they're signals that the workforce is changing fast and retirement readiness is at risk for millions.
The data driving the retirement savings conversation
Employed caregivers spend an average of 26 hours per week on unpaid care, costing employers $5,600 annually per employee in lost productivity alone, according to Guardian and Keita Fakeye, et. al and employees who leave the workforce or reduce their hours for caregiving further increasing the financial costs to employers in turnover and replacement costs.
A lack of child care alone costs each state on average $1 billion annually in increased absenteeism, turnover, lost tax revenue, and shrinking talent pools reports the US Chamber of Commerce. On an individual level, U.S. families spend on average 9-16% of their income per child on care says the US Department of Labor when the HHS recommendation is 7%.
And while we think about these stats and what they mean for individual business, companies, and the economy now — what often doesn’t get talked about is the longer term financial impacts. Employees who reduce hours or leave the workforce for caregiving face long-term financial consequences: lower lifetime earnings, reduced retirement contributions, and diminished Social Security benefits. According to AARP, 1 in 5 adults over 50 have no retirement savings, and nearly 25% expect never to fully retire. Longer lifespans mean employees are working longer, making it more likely that they are managing senior/elder care responsibilities. At the same time, caregiving to stay in the workplace is expensive, also impacting ones ability to save for short term emergencies and invest in retirement savings for the future. And traditional family support systems — like grandparents helping with child care — are evaporating as older adults remain in the workforce by choice or financial necessity.
One in five adults provide uncompensated expenses as a component of senior/elder care (think transportation and home renovations) costing an average $7,000 annually according to TIAA. These financial pressures create liquidity issues and hinder long-term savings. One-third of caregivers have left a job because of their caregiving responsibility, says the Rosalynn Carter Institute and women are leaving the workforce at a rate higher than it has been in the past forty years, reports the University of Kansas, as they disproportionately shoulder caregiving responsibilities and are especially impacted financially — compounding the wage gap and retirement insecurity.
Supporting caregivers isn’t just a short-term solution — it impacts employees, and the economy, for life. Helping caregivers stay in the workforce – through affordable caregiving benefits that provide actual caregiver supply — protects both employees’ financial futures and employers’ bottom lines.
