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The Trickle-Down Effect of Caregiving on Women

From finance to health, the impact can be greater than many older women realize

Mature businesswoman with hand on her head sitting at a desk, looking stressed.

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Of the more than 40 million Americans serving as caregivers to their loved ones — a figure expected to grow as more boomers, and their parents, get older — 60 percent are women. And for them, the decision to do what feels like the right thing can have major repercussions down the road.

This message was a key takeaway from several panel discussions held this week at a Washington, D.C., conference that explored major issues women face today. Conference speakers as varied as senators and tech leaders underscored how the trickle-down effect of pausing careers to care for family members hits women hard in areas from saving for retirement to taking care of their own health.

While it might not be surprising that what one panelist called the “psychic and financial toll” of taking care of family members is a major reason women drop out of the workforce, the collective impact of such decisions can affect things such as the growing number of older women who face poverty and our nation's economy overall. How big is the impact? If women received income for the unpaid caregiving they currently provide, that amount would be “equal to the Medicaid budget,” noted Sen. Tammy Baldwin (D-Wis.)

As Aparna Mathur, of the American Enterprise Institute, described it, women dropping out of the labor force — which she noted happens here more than in other developed nations — has major effects on family budgets because “all middle-class growth since the 1970s can be linked to women in the labor force.”

Noting that it’s “not just a women’s issue, it’s an economic issue,” Mathur said that policies that support paid family leave could “make it more likely that women come back to their employers and have a career instead of dropping out.”

For more on caregiving, visit AARP's Care Guides.

And while such paid leave policies are often framed to help new mothers and fathers, they can, and should, apply to a vast — and rapidly growing — number of boomer caregivers, noted Nancy LeaMond, executive vice president, chief advocacy and engagement officer for AARP, who spoke on a panel devoted to caregiving policies and challenges.  

“Family caregiving is a job with no age discrimination,” she said, explaining that of the 40 million family caregivers in our country, 10,000 a day are turning 65.

And for those boomers, the personal financial repercussions of shifting gears to focus on an aging parent can be the most weighty of all. As experts at the conference pointed out, a 60-something woman who stops working sooner than expected takes herself out of any employee-sponsored retirement savings plan, which research shows is the most effective method overall for saving for your golden years, noted panelist Kathleen Kennedy Townsend, director of Retirement Security at the Economic Policy Institute.

In fact, that 60-something woman leaving the workforce earlier than planned may be doing so at the very moment her earnings are at their highest levels. This in turn can trim her Social Security check for the rest of her life because benefits are calculated based on your 35 top-earning years.

Packing up before you’re 70 also means a smaller monthly Social Security check — a significantly smaller one, stressed Sen. Susan Collins (R-Maine), who wants to see more women work until that key benefit threshold, especially as women continue to outlive men. “I don’t think people understand what a huge difference it makes in terms of your monthly Social Security check,”  she said, urging women to wait, if they can, until age 70 to claim benefits.