Unpaid family caregivers would get a retirement boost under new proposal

By Jessica Hall

The burden of providing unpaid care falls disproportionately on women

A bipartisan proposal in Congress would help unpaid family caregivers make up some lost retirement income.

Under the bill, people who were out of the workforce for at least one year and received no pay for caring for a family member could make extra contributions to their retirement account in years prior to turning 50. To arrive at the age when the additional contributions would begin, the eligible number of years out of the workforce would be subtracted from age 50.

Under current law, there are annual contribution limits for retirement accounts, and starting at age 50, workers can make extra catch-up contributions.

The bill comes as caregiving is increasingly seen a a major public health and economic issue.

Care provided by unpaid family caregivers across the U.S. was valued at $600 billion in 2021, according to AARP. That figure was based on about 38 million caregivers providing an average of 18 hours of care per week, for a total of 36 billion hours, at an average value of $16.59 an hour, AARP said.

"Individuals who leave the workforce to provide care for a loved one should not be penalized on their retirement and forced to do more with less later in life," U.S. Rep. Chris Pappas, a Democrat from New Hampshire, said in a statement. "This bipartisan legislation will allow caregivers to make catch-up payments to their 401(k), IRAs, and other accounts so they don't lose out on valuable retirement savings as a result of the time they took to help a family member in need."

Pappas introduced the bill, called the Expanding Access to Retirement Savings for Caregivers Act, with U.S. Rep. Claudia Tenney, a Republican from New York, on Dec. 13. U.S. Rep. Debbie Lesko, a Republican from Arizona, was also an original co-sponsor.

"The burden of unpaid care needs continues to disproportionately fall on women, with devastating effects on health, well-being, and labor-force participation," according to research published in JAMA Network. In the U.S., women provide 2.2 times more unpaid family caregiving than do men.

"Many individuals across the country take time away from work to care for a loved one, which can result in missed opportunities to save for retirement," Tenney said in a statement. "This would help us move away from a system that disadvantages caregivers and instead offer additional tools for them to contribute to their retirement savings."

Also read: How to include people with Alzheimer's in holiday celebrations: Start small and keep it simple

And: Alone and unable to care for themselves: This is the plight of millions of older Americans

-Jessica Hall

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12-16-23 0954ET

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