Retirement security for caregivers a focus of new bills in Congress

There is a bipartisan effort in Congress to help family caregivers save more for retirement.

A. invoice New legislation introduced in both the House and Senate last week would ease Roth IRA contribution rules for caregivers. another one measurementThis legislation, proposed in both chambers, would allow caregivers of all ages to make “catch-up” contributions (extra amounts currently set aside for workers age 50 and older) to workplace retirement plans such as 401(k)s. Family caregivers who provide assistance to people with illness, disability or age-related needs often work without pay and often have to reduce their working hours or take time away from their job altogether.

“This bipartisan bill will give these individuals a better opportunity to build a secure financial future and help ensure they are not penalized for the vital care they provide,” Sen. Susan Collins, R-Maine, said in a statement.

House bills were referred to the Ways and Means Committee; Senate bills are sent to the Finance Committee.

The new proposals are part of ongoing efforts by some lawmakers and policymakers to address the financial strain caregiving can put on individuals, including their ability to save for retirement.

Family caregivers are provided Nearly $1 trillion in care will be provided in 2024, and nearly all of that amount will go unpaid, according to a recent report from the AARP Public Policy Institute, which conducts research and policy analysis. 78 percent of caregivers report out-of-pocket expenses related to care; The average annual expenditure is 7,242 dollars. 2021 AARP survey.

Three out of every five caregivers are women and they are 51 years old on average. 2025 joint report by AARP and the National Alliance for Care, a nonprofit advocacy and research group focused on caregivers.

Women generally tend to save less for retirement. According to Vanguard research, the average amount saved in a 401(k) across all ages is $126,971 for women and $171,859 for men. How America is Saving Money in 2025 report.

“Caregivers need all the help they can get,” said Cindy Hounsell, founder and president of the Women’s Institute for a Secure Retirement, a nonprofit organization that focuses on women’s long-term financial security and supports new congressional bills.

“Many times they have to quit their jobs to care for their parents, children or in-laws,” he said. “For this reason [these bills] “It’s a good thing and a step in the right direction.”

The U.S. population is also aging, which generally means more people need care. As people live longer and baby boomers reach retirement age in large numbers, the over-65 population grew 13% from 54.2 million in 2020 to 61.2 million in 2024. According to the Census Bureau. The United States is currently at “peak 65,” with a record number of Americans turning 65 each year.

First measure, Enhancing Retirement Security for Family Caregivers ActIt will allow qualified caregivers to contribute up to the annual maximum allowed in a Roth individual retirement account, even if their income that year is less. Under the bill, to qualify, a caregiver must provide 500 hours or more of care per year and work less than 500 hours for pay.

Current law limits 2026 contributions to IRAs to $7,500 or annual income, whichever is lower.

Caregivers may already have access to a similar benefit: If the caregiver is married and their spouse works, a spousal IRA may be a way to save for retirement. This option allows the working spouse to contribute to the IRA on behalf of the non-working spouse, provided the couple files a joint tax return and has enough earned income to cover the contributions.

The new bill is “similar in spirit to a spousal IRA, but broader and more flexible — especially for caregivers who don’t fully comply with the current rules,” said Paul Richman, chief executive and political affairs officer for the Insured Retirement Institute, a trade organization that represents financial firms. The group supports invoices.

Second bill, Capture Family Caregivers ActIt would allow individuals to contribute as much “catch-up” as possible to currently eligible individuals. Under current law, the standard contribution limit for 401(k)s is $24,500 for 2026. But if you’re at least 50, you can deposit an extra $8,000 this year; If you are between 60 and 63 years old, the amount is $11,250.

The congressional measure would allow caregivers to keep their pay, currently the highest extra limit above the standard limit of $11,250, for five more years when they return to the workforce, regardless of age.

There are other bills currently pending in Congress aimed at helping caregivers. bipartisan Care Credit ActThe company, which is based in both chambers, will provide a $5,000 tax credit to working caregivers.

Lowering Costs for Caregivers ActThe legislation, which is also bipartisan and bicameral, would allow caregivers to use health savings accounts or flexible spending accounts to cover their parents’ or in-laws’ medical expenses. The bills have been pending in the House Ways and Means or Senate Finance committees since they were introduced in March 2025.