Family Support, COVID-19, and Retirement Security

Anna Rappaport, FSA, MAAA is a member of the Pension Research Council Advisory Board, and the chairperson of the Society of Actuaries Committee on Post-Retirement Needs and Risks.  She is adamant that more recognition should be given to the role of family in retirement planning and management.

Family support is an important part of retirement security for many Americans, according to a recent report from the Society of Actuaries. My recent study titled Family is Important to Retirement Security shows that, while most people do not plan for family to assist them in their later years, in fact family members are often the first to whom many reach out for help. The COVID-19 pandemic has also created new challenges for many older persons, as reported in our related study Impact of COVID-19 on Family Dynamics in Retirement.

The Role of Family in Retirement

A century ago, there were no retirement systems in the U.S., and older people did not have the option to simply stop working as they do today. Instead, relatives lived together in multi-generational households, and family members cared for the older people unable to work.  Today, though many retirees live on their Social Security benefits, pensions, and retirement assets, family support for older people remains an important feature of the US retirement security system.

In a recent report from the Society of Actuaries, they surveyed individuals age 85+ to evaluate the types of help that older Americans receive.  Of the respondents contacted:

  • 49% said they had to be driven places,
  • 35% said they needed support in taking care of their residence,
  • 34% said they needed help with shopping,
  • 23% said required assistance with housekeeping, and
  • 8% said they needed assistance with personal care or activities of daily living.

Family members often help with many of these needs.

How COVID-19 Changes the Story

COVID-19 makes family help in retirement even more critical, while at the same time creating new challenges for families.  With most workplaces, schools, and colleges closed, COVID-19 has caused many families to work from home and quarantine together.  As a result, people are experiencing both life and work-related stresses.  When older family members live in multi-generational households, this can create new stresses, especially if space is limited. How to manage communal areas, activities at home, and social distancing all become topics that can generate tension.

Even when older relatives do not live with their relatives, they may need even more help because they have been told to self-isolate. In addition, care from home health aides may have been suspended, and sometimes caregivers who continue on the job grow overwhelmed due to short staffing or other pressures.  This then compounds the stress on adult children seeking to help their elderly parents, while trying to cope with their own COVID-19 issues.

Recently older family members living in nursing homes, assisted living, and other senior housing communities have been locked down due to the facilities’ efforts to contain the virus.  Some hospitals have also banned visitors. In this case, family members can no longer visit their relatives, causing strain for both parties. When elderly family members have cognitive or other health, mental, or physical challenges requiring support from their relatives, the bans have caused deep emotional pain and can create challenges and missteps in managing their care.

Family members often help their parents schedule and go to medical appointments, assist with medical care, and serve as their advocates.  Yet since many medical offices have shut down due to COVID-19, the helpers have struggled to find suitable health care services for their parents or others they are helping.

Our research shows that most Americans feel a strong obligation to help their family members. This is particularly important now, with high unemployment rates resulting from the pandemic. As a result, more parents are likely to assist their children and other younger family members in need. In turn, this will exert even greater pressure on those also helping their parents.

The Future

Family help will continue to be an important part of the US retirement security system.  Also, as people live longer, they will need more help.  Due to the disproportionately high number of COVID-19 deaths in nursing homes and other senior residences across the country, it is likely that, in the future, families will seek alternative living arrangements for their seniors where and when possible. More multi-generational households will therefore experience stress, particularly those worrying about keeping their own jobs and relationships while helping other family members as well.

Views of our Guest Bloggers are theirs alone, and not of the Pension Research Council, the Wharton School, or the University of Pennsylvania.