Although most Americans spend an average of 20 years in retirement, fewer than half have actually calculated how much they will need to save. If you’ve fallen into the trap waiting to save for retirement “someday,” the time to adjust your thinking is now. This is especially important if you have financial obligations that stem from caring for aging parents. Where does this leave your retirement fund? Without proper planning, a dependable homecare system, and healthy spending habits, it may be empty.
1. Know Your Retirement Needs
Experts agree you will need approximately 70 percent of your pre-retirement annual income in order to maintain your standard of living. Knowing your retirement needs is a crucial first step in the savings process. Look at anything and everything that will affect your retirement plans and take those figures into consideration. This will help you develop an accurate “financial picture” that will assist you in the plans and purchases you make. Talk to a financial planner if you feel you need additional direction.
2. Consider Your Caregiving Sacrifices
According to a study performed by the National Alliance for Caregiving, the average person caring for an aging loved one spends more than ten percent of their annual income on caregiving expenses. One-third of study participants admitted dipping into their personal savings to help cover the costs of care.
Another study reports that a caregiver can potentially lose out on more than $650,000 in wages, Social Security benefits, and pensions as a result of their caregiving responsibilities. Such missed opportunities can significantly impact a person’s retirement fund. One of the most effective ways to avoid this is by hiring professional caregivers to help carry the burden of care. Working with an agency that offers a reliable homecare system is the easiest way to stay involved with your parent’s care while still having a life of your own. A homecare system such as ClearCare offers you the complete peace of mind that comes from a robust homecare software that allows you to know exactly what goes on at your parent’s home.
Utilizing dependable homecare software like ClearCare helps you stay organized and make better use of your time. You will no longer be among the 62 percent of caregivers who are forced to turn down promotions or benefits at work. Thanks to the entire homecare system offered by ClearCare, you will no longer be spreading yourself too thin, unable to fulfill your work commitments, and losing out on retirement earnings. Families who rely on homecare software have more time for each other, and experience less stress. Can you just imagine the many other ways your family could benefit from home care software?
3. Turn Your Parent into a Deduction
If you’ve been spending big bucks caring for an aging parent, you may be able to claim them as a dependent. If your parent’s gross income does not exceed $3,700, she may qualify for dependent status – even if she doesn’t live in your home. If you are able to claim your parent as a dependent, there are many potential tax breaks. Money you’ve spent on medical costs – on your parent as well as anyone in the family dependent on you – can be used as a tax deduction.
Retirement may mean living on your pension, your savings, or Social Security. Only you can decide what is enough to live on. Carefully consider your current income and expenses with what you anticipate both will be in the future, develop a budget based on those projections, and stick to that budget. Used in combination with professional caregivers who use an innovative homecare software or homecare system, like ClearCare, you will soon see your retirement fund start to grow.