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Why caregivers face extra retirement hurdles

By Scott Gamm/

Adding to the challenging retirement financial landscape, a new survey reveals the growing concern among Americans who may also need to care for an aging parent, while trying to save for their own retirement.

According to a PNC survey, 60 percent of respondents worry about supporting parents physically, while 40 percent showed concern over assisting them financially.

Saving for retirement is a daunting undertaking, let alone while simultaneously supporting a parent.

"Caring for a loved one poses many challenges, including a major commitment of time and money," notes Joanne A. Shallcross, a PNC wealth planner. "It is essential to plan ahead with other family members to protect the financial health of one's self and family."

In fact, 30 percent of respondents who aren't currently in retirement plan on delaying retirement for fear of being unable to afford the costs associated with caring for elderly parents.

The list of sacrifices continue, as 29 percent reported bolstering their savings efforts, 24 percent opted to postpone luxury purchases and perhaps most eye-catchingly, 13 percent withdrew money early from a retirement account to support others. The consequences of taking money out of a retirement account before age 59.5 are steep, including a 10 percent penalty and ordinary income taxes.

Retirement balances should be kept safe and sound and not be viewed as an emergency savings fund.

Still, 36 percent of the study's 1,021 respondents, said that acting as a caregiver provides purpose in their life.

"You have to take care of yourself," says Peg Moore, managing director of investments for the Stutzmann - Moore Wealth Management Group of Wells Fargo Advisors in Ann Arbor, Mich. "Remove the parent factor for a second and figure out if you have enough money in a 401(k) or enough other guaranteed sources of income, since your expenses will usually be the same in retirement compared to when you were working."

Upon adding the variable of parents to your financial situation, you can see how this will change the equation, she says.

"Once you define the scenario, then you can map out a plan," she says.

This plan will largely consist of finding ways to put money aside for future parental expenses or more imminent ones.

"Look at your own behaviors of money," Moore adds. "Some people stress themselves out, but don't realize it may only take a fine-tune of their finances and not an overhaul. People tend to go to the extremes in their head."

Scott Gamm is the author of More Money, Please: The Financial Secrets You Never Learned in School.

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