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How does being a caregiver affect your finances?

On average, family caregivers spend $7,200 a year on out-of-pocket expenses.¹ These extra expenses can make it hard for you to save for—or even imagine—retirement. We’ll share tips to help you stay on track for retirement.

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Caregiving comes with out-of-pocket expenses


In the United States, 38.2 million people provide unpaid eldercare, and 70% also have jobs. Caregiving can cause financial strain from direct costs such as medical bills and equipment, as well as indirect costs such as lost wages and career interruptions. 

Research from the MIT AgeLab’s CareHive panel studied how these expenses can affect caregivers using a scale from 0.0 (not at all) to 1.0 (very much). 

Expenses causing financial strain for caregivers (ranked from highest to lowest)

Category   Definition Rating        
Household Bills and fees for assisted living or nursing homes, mortgage/rent, utilities, or auto/home insurance 0.47
Services Adult day care programs, legal service providers, geriatric care managers, or home repairs or modifications 0.39
Transportation Paratransit services, taxis or rideshares, or public transit passes 0.37
Medical Prescriptions, healthcare providers, rental expenses for medical equipment and mobility devices, medical insurance premiums, or out-of-pocket costs for uncovered care or specialized therapies 0.31
Technologies and products Personal assistant devices or smart displays, such as monitoring alerting systems or subscription fees, clothing, entertainment, or games 0.26
Personal products Personal hygiene items, adult diapers or other incontinence supplies, household supplies, groceries, personal services (e.g., haircuts, manicures, and massages), and phone, internet, cable, or television services for the care recipient 0.25

MIT AgeLab, December 2023.

How caregiving can affect retirement savings

Caregiving expenses can make saving for retirement difficult. There are some unique financial implications related to caregiving, including:

  • Reduced income—You may work fewer hours, leave your job, or retire early, which can reduce the amount of money available to save for retirement.
  • Decreased retirement contributions—Working less over time equals less money going into your 401(k) or IRA.
  • Withdrawing savings—Taking money from retirement accounts to cover expenses can reduce your savings, and you may potentially incur penalties.
  • Missing employer matching contributions—Leaving jobs or cutting hours can mean losing out on 401(k) matching contributions.
  • Lower Social Security benefits—Reduced earnings over a career can lead to smaller benefits in retirement. 

Direct versus indirect financial costs of caregiving

Cost type

Examples

Impact on retirement

Direct costs

Medical supplies, transportation, or home modifications

Reduces cash flow available for saving

Indirect costs

Lost wages, reduced hours, or missed promotions

Lowers lifetime earnings and contributions

Retirement planning for caregivers

Are you trying to balance work, caregiving, and saving for retirement? Here are some tips to consider that can help you stay on track.

  • Work with a financial professional—A professional can help you create a plan to manage caregiving costs, prioritize paying off debt and saving, and help keep your retirement goals on track.
  • Use educational tools and resources—Your company’s retirement plan website likely has financial education and wellness resources. Explore calculators, budgeting tools, and caregiver-focused articles or webinars to help build confidence in managing both caregiving and your finances.
  • Leverage your workplace benefits—Check if your employer offers flexible schedules, remote work options, emergency backup care, employee assistance programs (EAP), or caregiver support groups—and use them.
  • Build an emergency savings buffer—Open and fund a dedicated emergency savings account to handle unexpected caregiving expenses without derailing long-term savings.

Understand the cost of being a caregiver

The out-of-pocket and indirect costs of being a caregiver can strain your budget and make saving for retirement harder. With some planning, you can manage expenses while continuing to build your retirement savings. Taking small, consistent steps today can help support your financial well-being and keep your retirement goals on track. 

1 “The Overwhelming Financial Toll of Family Caregiving,” AARP, February 2025. 2 Emergency savings is a product offered by John Hancock Personal Financial Services, LLC, an SEC investment adviser registered under the Investment Advisers Act of 1940.

John Hancock and the Massachusetts Institute of Technology are not affiliated and neither is responsible for the liabilities of the other.

Important disclosures

The content of this document is for general information only and believed to be accurate and reliable as of the posting date but may be subject to change. It is not intended to provide investment, tax, plan design, or legal advice. Please consult your own independent advisor as to any investment, tax, or legal statements made.

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