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 day-to-day needs, and it can be just as emotionally draining as it is physically demanding. But in our effort to look out for those we love, we sometimes overlook the caregiver, who, despite appearing strong, faces their own challenges: physical, emotional, and financial.
From a financial planning perspective, caregiving is more than an emotional commitment—it is a life transition that can significantly alter income, benefits, retirement timing, and long-term financial security.
Imagine juggling a career while caring for a loved one. Data shows that 1 in 6 employed Americans also provide care for an elderly or disabled family member, and more than half of those caregivers work full-time.[1] That dual responsibility often forces difficult trade-offs between professional stability and family needs.
Struggles of the Dual Role
No matter how skilled you are at multitasking, eventually the strain of a dual role can take its toll. Everyone needs time to recharge, maintain perspective, and plan for their own future.
Here are some of the common impacts caregivers face:
- Unsatisfactory or declining performance at work
- Cutting back work hours or frequently adjusting schedules
- Taking unpaid leave (especially in states without Paid Family and Medical Leave programs)
- Early retirement to become a full-time caregiver
From a financial standpoint, these disruptions often result in reduced wages, lost employer benefits, fewer retirement plan contributions, and lower future Social Security benefits. Research estimates that caregivers age 50 and older who leave the workforce to care for parents lose more than $300,000 on average in lifetime wages and benefits, totaling nearly $3 trillion nationwide.[2]
Honoring Caregivers
November is National Family Caregiver Month—an opportunity to recognize the physical, mental, and emotional effort caregivers provide every day. It’s also a reminder that caregiving is a major financial life event that deserves thoughtful planning.
Whether by choice or necessity, many caregivers find themselves retiring earlier than planned. If you’re stepping away from the workforce, there are key financial considerations that can help ensure both you and your loved one remain supported.
How to Plan for Becoming a Caregiver
As part of the “sandwich generation,” you may be balancing raising children, supporting aging parents, and managing your own financial goals. For some, this includes retiring early to provide full-time care. Planning ahead can help reduce financial stress and preserve long-term flexibility.
When faced with caregiving responsibilities, leaving the workforce may feel like the only option—but it isn’t always the first or only step.
- The Family and Medical Leave Act (FMLA) allows eligible employees of covered employers to take unpaid, job-protected leave for specific family and medical reasons. Check with your employer to understand your eligibility and benefits.[3]
- Some individuals may qualify for Medicaid programs that allow care recipients to manage home-care services, including compensating family caregivers in certain states. Medicaid rules vary widely, so it’s important to review your state’s specific guidelines.[4]
Financial Considerations of Early Retirement
Planning for retirement requires careful coordination, and caregiving adds another layer of complexity. Retiring early often means pausing or ending employer-sponsored retirement contributions, delaying Social Security benefits, and navigating health insurance coverage before Medicare eligibility.
You may also face early withdrawal penalties or tax implications if you need to access retirement funds sooner than planned. Understanding which assets to draw from—and when—can make a meaningful difference in long-term outcomes.
Despite these challenges, proactive income planning can help bridge potential gaps. Working with a financial planning professional can help align caregiving decisions with cash flow needs, tax strategy, healthcare planning, and long-term retirement goals.
Planning Beyond The Numbers
Every caregiving situation is unique, and it’s important to consider both short-term and long-term objectives. Do you plan to work part-time if capacity allows? Do you expect to re-enter the workforce later? Are there care alternatives that allow you to remain employed?
Clarifying these goals helps shape realistic financial projections and keeps your plan adaptable as circumstances evolve.
While financial planning is critical, emotional well-being matters too. Caregiving can be deeply meaningful, but it can also be isolating and exhausting.
Staying connected to your community—through support groups, hobbies, or professional counseling—can help protect your mental health during this transition. A healthy caregiver is better positioned to support others and make confident financial decisions.
You’ve Got This––and We’ve Got You
Becoming a caregiver, especially when it involves early retirement, brings many moving pieces—from income planning and healthcare coverage to emotional resilience and long-term security.
Your financial professional can help you evaluate options, identify resources, and adjust your plan so caregiving doesn’t mean sacrificing your own financial future.
If there’s anything we can do to support you through this transition, please reach out.
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Disclosure
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 www.mbewealth.com. MBE Wealth Management, LLC is a registered investment advisor.
This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.
Sources
[1]National Alliance for Caregiving & AARP. Caregiving in the U.S
[2]AARP Public Policy Institute.Valuing the Invaluable: 2019 Update
[3]U.S. Department of Labor. Family and Medical Leave Act (FMLA)
[4]Medicaid.gov. Self-Directed Services and Home- and Community-Based Services (HCBS)