According to the Pew Research Center, in 2021, many stay-at-home moms (79%) and dads (23%) said they took care of the home or family, otherwise known as caregiving. Anyone who has found themselves in a comparable situation knows that leaving corporate America for a life of housekeeping and caregiving is no walk in the park. Maintaining a “stay-at-home” designation, whether for your kids or for other loved ones, is just as tiresome as a “corporate” position—if not more so. So, what are some tips to help stay-at-home caregivers focus on “employee benefits” like salary, life insurance and retirement (social security and 401[k]s) like those of their office counterparts? In this article, we will dive into all three benefit areas.
A common concern for those considering entering a stay-at-home position is the loss of salary. For example, a two-adult household where one partner decides to stay at home goes from a two-income to a single-income family. Not to mention the unique mental burdens placed on both the “working” and the stay-at-home parent. Because there is plenty of work to match the hectic work schedule of a full-time job, sites like TaxSlayer say, “There are several potential credits associated with having dependents – the biggest being the Child Tax Credit,” which recognizes stay-at-home status and may help soften the blow of a loss of income. Also, according to job sites like Indeed.com, a search performed on Google from Pittsburgh, Pennsylvania, on January 25, 2024, showed 513 available jobs for stay-at-home parents (i.e., jobs that can be done during naptime or periods where someone else can take over). All this shows that there are options for those who still need to generate an income while performing their caregiving duties.
In my experience, life insurance is an income benefit offered by many employers but not commonly thought about in the younger demographic or during the decision to “stay at home.”
My wife, mother of two and former stay-at-home mom, looked at the life insurance benefit offered by my former company, which covered one year’s salary and realized how quickly that would be depleted should something ever happen to me. It had her considering additional coverage for both me and her. Because she hadn’t ruled out pursuing her career later down the road, a Select Choice Term Life1 insurance policy with a spousal rider from GBU could have given us the additional coverage needed to supplement my benefit from work. This policy could have also cost-effectively covered her should something have happened to her during that time.
Lastly, another important factor in the decision to stay at home is retirement. Did you know that, according
to a 2023 survey by the Employee Benefit Research Institute, 26% of caregivers in the upper-income group are less confident in their retirement prospects than non-caregivers? In a standard office position, a portion of employees’ salaries are deducted and sent towards their social security and are oftentimes elected for building up a 401(k). But are families factoring that in when deciding to go to full-time “stay at home”? It’s especially important to consider if the “stay-at-home” status is temporary and that person wants to get back into the workforce later on. There are companies like APB Retirement to help you facilitate a 401k plan that works for you/your role as a stay-at-home caregiver. Alternatively, rolling money over from a previous 401(k) to a GBU Future Flex Fixed Index Annuity2 will allow your retirement savings to continue to grow, while protecting against the loss of principal. You can add additional funds to this annuity at any time as you are able.
Overall, we need to acknowledge the necessities of caregivers and the impact this decision will have on the “employee benefits” we discussed like supplemented income and making up or lessening the hit when going from a two-person income down to one. We also touched on life insurance policies should anything happen to the one choosing the responsibility of staying at home and taking care of those who matter most. And finally, we finished with efforts to continue growing retirement savings for the stay-at-home caregiver. With the rising cost of care, both for children and adults, it’s no wonder why so many are choosing a stay-at-home life. But we want to make sure that we’re doing it in the most fiscally responsible way.
1
GBU Life is the marketing name for GBU Financial Life (GBU), Pittsburgh, PA. Coverage can remain in force until age 95 as long as premiums are paid when due, however, after your level-term period ends, your coverage becomes annually renewable with rates that will increase annually. Convertible to permanent whole life insurance up to age 70. Riders are optional and have additional fees associated with them.
Please see policy and rider coverage for complete details.
Policy Form Series: ICC20-ST, FL20-ST.2, GEN20-ST, ND20-ST.
2 Annuities are not short-term products and are issued by GBU. Withdrawals prior to 59½ may be subject to IRS penalties. Products and features may not be available in all states. This is a summary of the contract provisions. Please refer to the contract for complete details of surrender charge schedule, benefits and exclusions. NOT A DEPOSIT OF A BANK AND MAY LOSE VALUE-NOT BANK GUARANTEED. Contract Form Series: ICC23_FPDA_IA_ CON_(01-23), FPDA_IA_CON_FL_(07-23), FPDA_IA_CON_ (07-23), FPDA_IA_CON_(07-23)ND, ICC23_SPDA_IA_CON_ (01-23), SPDA_IA_CON_FL_(07-23), SPDA_IA_CON_(07-23), SPDA_IA_CON_(07-23)ND.
Life insurance underwritten and annuities offered by GBU. Coverage is subject to approval and may not be available in all states.
GBU and its agents do not provide tax, legal or investment advice. Please consult with a legal or tax professional prior to the purchase of any contract.
GBU is not affiliated with the organization(s) listed herein.
