Retiring Early to Care for A Loved One

December 14, 2022

It’s no fun being sick or getting old so the ill and the elderly often tug at our heartstrings. It’s tough having to depend on others for your day-to-day and it is equally draining, emotionally as it is physically. But then, in our effort to look out for the weak, we sometimes look past the struggles of the caregiver who, despite appearing strong, has their own hurdles to overcome – physical, emotional, and even financial.

Imagine having to juggle your career and caring for a loved one. In fact, data reveals that 1 in 6 employed Americans are also helping out in the care of an elderly or disabled family member or relative, and 56% of these employed caregivers are working full-time.


Struggles of the Dual Role
No matter how good you are with multi-tasking, you’ll eventually feel the burn of playing a dual role. Who can blame you? We all need a break, to take time off for some “me” time, and the headspace to also plan for our future.

Here are some of the impacts of living a double life on caregivers.

  • Unsatisfactory or poor performance at work
  • Cutting back work hours or constantly rearranging work schedules
  • Taking unpaid leave (for those living in states without Paid Family and Medical Leave legislation)
  • Early retirement to become a full-time caregiver

These things will ultimately lead to loss of wages, health insurance and other job benefits, retirement savings or investment, and Social Security benefits–losses. For example, 10 million caregivers (aged 50 and above) who care for their parents, lose about $3 trillion in wages, pensions, retirement funds, and benefits.


Honoring Caregivers
November was National Family Caregiver Month, an opportunity to honor the physical, mental and emotional effort caregivers put into their role every day. When looking after a loved one, it’s important to understand the financial challenges this life milestone can create.

Whether by choice or necessity, many caregivers may find themselves retiring early. If you’re exiting the workforce, there are a few things to consider to make sure you and your family are supported.


How to Plan for Becoming a Caregiver
As part of the “sandwich” generation, you have a lot on your plate. You may be raising children, taking care of aging parents and managing your other personal responsibilities. For many people, juggling all of these tasks might include retiring early to become a full-time caregiver. Here are a few things to consider if you find yourself leaving the workforce to care for a loved one.


When faced with the responsibility of becoming a full-time caregiver, you might think that your only option is to leave the workforce. But there are a few other resources available that may be useful in your situation.

The Family Medical Leave Act allows for “eligible employees of covered employers to take unpaid, job-protected leave for specified family and medical reasons.” Check with your company if they offer this coverage.

You may also be eligible to receive Medicaid, which can allow qualified individuals to manage their own home-care services. Medicaid differs by state, so contact your state’s Medicaid program to see if you or your loved one qualify.

Planning for retirement takes careful strategizing and becoming a caregiver adds a new wrinkle. By retiring early, you may miss out on ongoing contributions to an employer-sponsored retirement plan. In addition, you may not have access to Social Security, Medicare or pensions yet. You may also be hit with withdrawal penalties if you want to access your retirement funds early.

However, even with these additional complications, it’s still possible to prepare ahead for any income gaps. Working with a qualified retirement planning financial professional is key to making this transition a smooth one.


Every caregiving situation is different and it’s important to consider both your short-term and long-term goals. Do you plan to take on a part-time job if you have the time and capacity? Do you want to re-enter the workforce? Are there other options available so you can still work while your loved one is taken care of? Having a clear sense of what you want for yourself can help you plan for your financial situation in the coming years.


While it’s important to plan for the financial changes of becoming a caregiver, it’s important to consider the emotional changes as well. Being a caregiver can be hugely rewarding, but can also take a toll on your mental health.

Consider ways to maintain your connections to your community while being out of the workforce. This could include joining a support group with other caregivers, picking up a new hobby or making time to connect with friends and family more often. There are also mental health professionals that specialize in working with caregivers. You don’t need to trade your own mental health for the health of your loved one. A healthy, happy caregiver is a confident caregiver.


You’ve Got This and We’ve Got You.
There’s a lot to consider when becoming a caregiver, especially if you plan to retire early to focus on your new role. Be sure to consider all your available resources to help close any income gaps and account for the financial and emotional changes you’ll likely undergo, from income planning to finding a support system.

And remember, your financial professional is here to help with life’s big transitions. If there’s anything we can do to support you, please reach out.

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The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. You should consult your financial advisor, attorney, or tax advisor. For additional information and disclosures, please visit our website at MBE Wealth Management, LLC is a registered investment advisor.


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