When you’re not sure if you want to return to work, you’re thinking a lot about how work will affect your life—and your family—today. This is a bit of luxurious thinking because a current comfortable financial situation could easily change in the future.
I’m not looking to be the purveyor of doom—only reality. We’ve all seen many senior executives lose jobs since 2008, and there are few if any jobs—at any level—that come with a lifetime guarantee. The potential loss of a primary breadwinner’s job is the obvious possibility—but few women weighing the pros and cons of work think very carefully of two other difficult issues that could wreak havoc on family finances:
- elder care for parents, and
- their own retirement security.
We all know that people are living longer than ever—and it’s inevitable that at some point your parents will need more medical care and more home care. Unless there is a long-term care policy, large savings to draw on or very valuable properties to sell, many of the elderly do not have enough resources to fund the needs of their final years. More often than not, their children have to step in and help—which poses a big financial burden.
Even some of the most high-income executives cannot easily shoulder the financial burden of one to four ailing parents without some negative impact to their current lifestyle and their own retirement nest egg.
Few people know, pay attention to or face some very difficult facts that can be found on the Mature Market Institute web site :
- The national average daily rate for a private room in a nursing home rose 4.4% from $229 in 2010 to $239 in 2011.
- The national average monthly base rate in an assisted living community rose 5.6% from $3,293 in 2010 to $3,477 in 2011.
- The national average hourly rates for home health aides ($21) and homemakers ($19) were unchanged from 2010.
- Many people incorrectly believe that health insurance, Medicare, or disability insurance will cover the costs of long-term care.
These eye-opening figures compel me to work even harder because I have a parent who may eventually need financial help. I personally don’t think it is fair to put the burden of that possibility on my husband, since it is my parent. Generally speaking, I have always lived by the “you never know” motto, which I think is especially important for women who often outlive their spouses or become divorced after many years out of the workforce.
When I was citing these figures to a mid-level executive woman nearing age 50, she said that she would just have her widowed mother live with her family when her mother’s own resources run out. That conversation inspired this blog because I saw many holes in her thinking. I pointed out that she works, and her husband works, and someone would need to care for her mother during the day. At an average of $20 per hour—that’s at least $800 per week that she would have to cover–a big nut by any standards.
Women often say that they don’t want to return to work because they feel that they have to be home for their children. I absolutely understand and respect this decision, but it does not foot with my “you never know” equation– unless you’re absolutely sure that your own and parental retirement expenses will be sufficiently funded. I contend that the stress of suddenly assuming the financial burden of your parent’s care or depleting your own retirement savings (thus passing on the burden of your own elder care) would have a far more profound impact on your children than going to work today. —KAS