The Needs of Sandwich Caregivers and Career Extenders

Jessica Tuman took on her role as head of the Voya Cares program more than five years ago, and while discussing her work during a recent interview with PLANADVISER, she said the experience has been both eye opening and gratifying.

In particular, Tuman says, the COVID-19 pandemic has put a clear spotlight on the way caregiving and the health and welfare of a worker’s family bear directly on their ability to succeed and thrive personally and professionally.

“I think one thing the pandemic has helped to demonstrate is that we are all at some point going to be in a situation where we have to care for an elderly parent or a sick family member,” Tuman says. “It has also demonstrated the acute challenges faced by those people in Generation X, who are really in a sandwich caregiver situation right now, having to support both their own children and aging parents.”

Tuman points to Voya Cares research showing about one in five American employees is now a caregiver, while also citing statistics showing the employers tend to underestimate how many of their own people are in a caregiving situation. And while many employers say they would like to do more to address the needs of this population, they say the biggest barrier to doing more is making a compelling business case to invest in additional relevant benefits.

“One positive aspect of the Great Resignation, as it has come to be called, is that it is helping employers to see the inherent value in the types of ancillary benefits that are going to be relevant and useful to caregivers,” Tuman notes. “Not only do these benefits create employee loyalty and good will, but they also can reduce employee stress and help to increase productivity. In that sense, there is a very strong business case for considering them.”

Voya Cares research show there is a significant physical, emotional and financial impact on caregiving employees and employees with disabilities. In one survey, four out of five caregiving employees said that they experienced increased stress or anxiety as a result of their dual roles, and a majority also report using sick days, personal leave or vacation time to provide care. As a result, common issues reported by caregivers include trouble sleeping, depression and anxiety.

“In addition, compared to the general population of employees, caregivers and employees with disabilities and special needs are in a more uncertain financial situation,” Tuman warns. “More than half of caregivers and employees with disabilities surveyed are concerned that the money they have or the money they will save won’t last.”

Tuman says this information should galvanize employers to take actions to support their many caregivers. Doing so can help them substantially reduce employee replacement costs and prevent productivity losses.

“It is costly and time consuming for employers to replace employees, and caregivers can feel like they do not have a choice but to leave a position, if they do not feel like they have the support or flexibility they need to juggle caregiving and work,” Tuman warns. “Additionally, it is common for caregivers to need to take time off to provide care. One in five caregivers has quit work entirely due to caregiving demands and feeling like they cannot satisfy the demands of both roles.”

Tuman emphasizes that none of these points suggest employing caregivers and people with disabilities has a negative effect on a company. In fact, research has shown that a majority of employee caregivers are senior level and likely some of the highest-performing talent in an organization.

When asked to rate which benefits are most important to them, employees list three typical top choices:good medical insurance, a generous retirement plan and ample paid time off. However, in addition to these, there are other benefits and resources that especially appeal to caregivers and employees with disabilities and special needs. These benefits include:

• Legal benefits. More than half of employees with disabilities and special needs and caregivers rate this as an important benefit, as they may have additional considerations that drive demand for legal services.
• Health saving accounts and flexible spending accounts. All employees, especially individuals with disabilities and special needs and caregivers, value tax-advantaged benefits that help them save for current and future expenses.
• Disability and long-term care insurance. A large majority of caregivers and individuals with disabilities (80%) rate disability insurance and long-term care insurance as important benefits.
• Assistance finding providers and resources. Offering a care concierge benefit that helps caregivers find service providers and resources in their area can help relieve the stress and time demands that may otherwise detract from productivity.

“I can tell you, as a manager myself, just how important some of these benefits can be to individuals who are feeling the caregiver squeeze,” Tuman says. “Providing support and flexibility is one of the best ways to build employee loyalty. It’s not even about giving them so much extra money or time off. It’s the fact that they know their employer has their back and that they can get the emotional support they need.”

In addition to addressing these issues, Tuman says, Voya Cares is also focusing on a category of employees called “career extenders.” These are people working past what would be considered a typical retirement age, as they are either not financially ready to retire or voluntarily continuing a successful career. Voya Cares’ research shows nearly 20% of Americans over age 65—a total of 10.6 million people—are either working or looking for work, representing a 57-year high.

“These employees are hoping for support with efficiently accessing things like Medicare and Social Security, while also navigating their need to draw required minimum distributions from retirement plans,” Tuman says. “The financial picture they face can be quite complicated, and employers should be taking steps to help them.”

These steps include providing older employees with targeted education and access to high-quality financial advice. Further, for those working past retirement age who wish to accumulate more retirement savings, individual retirement accounts offer a few ways to build their nest eggs. Catch-up contributions, available to those age 50 or older, increase the amount that career extenders can save in IRAs. Often overlooked, these additional contributions above the standard limit can make a big difference later in life.

Many career extenders have multiple streams of income, potentially from a pension or Social Security, coming on top of their earned income. As a result, they may have excess cash after paying for their monthly expenses. As such, contributing to an IRA may be an option to invest a portion of their additional cash flow, while benefiting from tax reductions.