Millions of Americans take on difficult family caregiving duties because it is the only way they can be certain their loved ones are getting what they need. Unfortunately, too many caregivers face financial uncertainty because of it. And it is time to do something about that.
Reps. Claudia Tenney (R-NY), Chris Pappas (D-NH) and Debbie Lesko (R-AZ) just put forward a bipartisan bill that acknowledges the financial stress on individuals who take on the responsibility to become an unpaid caregiver to a loved one. The legislation gives those individuals a tool to make up for lost opportunities to save for retirement due to being out of the workforce.
Specifically, the Expanding Access to Retirement Savings for Caregivers Act (H.R. 6772) allows unpaid caregivers who took at least one year out of the workforce to make earlier “catch-up” contributions into their retirement savings accounts. A catch-up contribution is an additional amount of money ($7,500 for 2024) that individuals who are 50 years of age or older can contribute to their retirement savings account above the standard limits. This bill allows caregivers to make catch-up contributions prior to age 50.
Catch-up contributions are designed to help older individuals accelerate their savings as they approach their retirement years. Congress has long recognized with these catch-up contributions that individuals closer to retirement have a shorter time frame to build up their nest egg. That same logic applies to caregivers removed from the workforce.
It is no surprise that the Employee Benefit Research Institute and Greenwald Associates found in their latest Retirement Confidence Survey that caregivers are less likely to have saved for retirement and more likely to have retired earlier than planned than non-caregivers.
Providing this savings enhancement for caregivers is critical to help ensure their financial well-being so they can retire with dignity. We look forward to working with policymakers to advance this legislation and explore other opportunities to support our caregivers.
Andrew Remo serves as Vice President, Retirement Security for the American Council of Life Insurers. In this capacity, he plays a leading role in advocating for policies that help people access the tools they need to save and ensure those savings last a lifetime. Previously, Andrew worked on these issues for the American Retirement Association and on Capitol Hill.
