Tackling the Family Caregiver Squeeze

DEEP DIVE

Tackling the Family Caregiver Squeeze

By Liz Seegert

Some states and employers are making efforts to reduce the financial penalties that come with looking after an older relative.

For 31 years, Anita Robinson worked in international tech consulting, helping banks and retailers solve complex business problems. She expected to keep going, building her pension and retirement savings during what should have been her highest-earning years. Instead, Robinson retired much sooner than planned.

Her mother’s declining health — blindness, dementia and cancer — had become too much for her elderly father to manage alone. Robinson first tried working remotely during the pandemic, then took leave under the Family and Medical Leave Act (FMLA), which entitled her to 12 weeks of unpaid leave over a 12-month period. She moved her mother to Atlanta to live with her, cobbling together help from family members and paid aides, some charging as much as $32 an hour. But as offices reopened and business travel resumed, none of it proved sustainable.

“I had planned to retire already at 62, but I had to retire at 57,” Robinson says. “That’s at least five working years that I’m not contributing towards pension, Social Security or retirement.” Taking her pension early permanently reduced the benefit by roughly a third.

$1 Trillion

Economic value of unpaid labor provided by family caregivers, according to
AARP

Robinson’s story is increasingly common. More than 63 million Americans provide care for an adult family member or friend each year. The majority are responsible for an older parent, spouse or other relative. Three in five are women, often in their late forties or early fifties. The annual economic value of this unpaid labor has reached $1 trillion, according to recent data from AARP. That’s more than the revenue of Amazon or Walmart.

This care means millions of older adults can remain at home, providing enormous savings for the healthcare system as well as peace of mind for families. Yet caregiving often comes at a steep personal price. Family caregivers routinely scale back their careers, forgo promotions, leave the workforce early or tap retirement savings to cover lost income and rising caregiving expenses, jeopardizing their own long-term financial security — as well as their health and emotional well-being.

As Americans live longer and the country’s population ages — with adults over 65 set to outnumber children by 2034 — the demand for care continues to grow. Researchers warn that the nation’s financial, workplace and public policy systems remain poorly equipped to support family caregivers. Most retirement planning assumes uninterrupted careers, even though caregiving has become one of the leading reasons midlife workers — especially women — leave the workforce early. And Medicare assistance, though available to family caregivers, is often inadequate. Among the 34 states that reported time-based Medicare payments for personal care providers, more than half pay less than $20 per hour, according to KFF Health News. In addition, the 2025 federal budget slashes safety net programs for older adults, people with disabilities and their family caregivers, though many of those cuts may not take effect for years.

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But some progress is being made. Following the passage of parental leave laws in 14 states and the District of Columbia since 2002, researchers, employers and policymakers continue to come to grips with how adult care fits into people’s work lives and the overall economy. Large employers are starting to offer workplace flexibility and financial planning tools, and 13 states and the District of Columbia now offer some type of paid family leave policy. Although policies are fragmented and often financially insufficient, they signal a response to a widely recognized problem: How can people afford to take care of their loved ones while still taking care of themselves?

KEEP READING

ISSUE 12

FIVE QUESTIONS
Arielle Galinsky on Connecting “Olders and Youngers”

IN THE NEWS
David Rehkopf on the Longevity Class Divide

DEEP DIVE
Tackling the Family Caregiver Squeeze

GRANDPEOPLE
Bibliophile on Wheels

FROM THE EDITOR

ALT/SHIFT
Hollywood’s Age Shift Is Underway

LONGEVITY LITERACY
Rejuvenation Science

GAME CHANGER
Daron “Farmer D” Joffe on Roots and Renewal

FINANCING LONGER LIVES
Millennials Reach Key Milestones Later

@SCL
Mauricio Lopez-Mendez: Charting Easier Paths for Dementia Patients
Colombia Court Cites Center’s Research
Summer Podcasts

A “Caregiving Stage” for Women

Cindy Hounsell, founder and president of the Women’s Institute for a Secure Retirement, says many women think they’re doing the right thing by taking Social Security at 62 or making 401(k) withdrawals before age 59½ to keep a parent in their home. In reality, they’re destroying their own future security. “They’re not aware of any of the penalties,” Hounsell says. “And then it’s a penalty for the rest of your life.”

A report from the TIAA Institute similarly found that caregivers, particularly women, retire with significantly lower financial resources due to a combination of stopped contributions and emergency withdrawals. Class and race are also factors. Among Americans with an aging parent, spouse or partner, those with lower incomes are nearly two and a half times as likely to become unpaid family caregivers as those with upper incomes, according to a 2025 Pew Research Center survey. On average, 65-year-olds need to put aside $135,000 to pay for long-term care in their old age, according to a report by the actuarial firm Milliman Inc. Often that doesn’t happen, which leads family caregivers to spend on average 26 percent of their personal income on caregiving expenses. The Milliman report advises Americans to save early to cover their long-term care costs to avoid passing them on to younger family members.

When a person steps away from the workforce to care for a parent, they aren’t just losing today’s paycheck, observes Susan Golden, a lecturer at the Stanford Graduate School of Business and author of Landscape of Caregiving Innovations. Golden points to a lifetime average economic loss of $300,000 for caregivers who reduce their hours, forgo promotions or quit their jobs entirely.

Women are disproportionately hit because they are already battling a lifetime of salary inequality. “Then comes a caregiving stage that can last far longer than anyone anticipates,” Golden says.

Golden speaks from personal experience. She took a pause from her career as venture capital partner for what she thought would be a few years when her children were young. But she ended up also caring for her widowed mother, and her “short break” ended up lasting 15 years. “I never thought about the Social Security benefits. I knew I was taking a hit on my salary and my equity in the firm I worked for, but I thought, ‘Oh, I’ll catch up,’” she says.

“Every hour shifted from paid work to unpaid care translates into a lower Social Security check for life.”

Cassandra Kelly also knows this scenario. At age 40, she packed up her two young children and moved from New Jersey to Kentucky to care first for her elderly grandparents, and now, her great-uncle. She confronted a financial mess, in part due to her grandmother’s dementia and her grandfather’s complex medical situation. The mortgage hadn’t been paid for months, overdue bills were sitting untouched, the house was in disrepair, and she couldn’t get any social services from the state. Kelly ended up putting many of her grandparents’ expenses on her credit cards, which plunged her into serious debt. But she felt she had no other choice.

While her remote job allows for some scheduling flexibility, she is afraid to take extended leave for fear of losing her position. “I don’t have any assets or any savings because I ended up having to take out early withdrawals from 401(k)s,” she says. She also does not have any employer benefits, so she pays for health insurance out of pocket.

Kelly is among the 55 percent of African American caregivers who find themselves in high-intensity situations. “They’re caring for someone with more chronic diseases. They’re caring for someone that has less access to that care,” says Rita Choula, senior director of caregiving at the AARP Public Policy Institute. “And they have to factor in things like advocating for these individuals.”

Kelly has applied for a Medicaid waiver to be paid as a family caregiver, but the process is onerous and long. While the exact rules for waivers vary by state and by program, all 50 states plus the District of Columbia allow payment through at least one Medicaid home-care program, and 11 states also have structured family caregiving programs, according to a KFF survey. These structured models, which began rolling out in 2019, pay a provider agency, which then pays the family caregiver a daily stipend while also supplying oversight, training and some backup support.

The Paid Leave Battlefield

Extra costs can sneak up on families, as they did for Kelly. Nearly one in five family caregivers report experiencing high financial strain as a result of providing care. An Urban Institute report on lifetime employment-related costs of caregiving shows that every hour shifted from paid work to unpaid care translates into a lower Social Security check for life.

“Paid family leave really helps people who need family leave, and it’s not just aging parents — it’s a spouse or your own health,” says report coauthor Karen Smith, a senior fellow at Urban.

In all but a handful of states, paid family and medical leave through employers is still optional, says Cynthia Hutchins, director of financial gerontology at Bank of America, although employees can apply through the federal FMLA. Hutchins researches and studies policies and programs that employers and employees should be thinking about as they’re approaching longer retirements.

“I think it’s a somewhat new battle. Some corporations have been quicker to respond than others,” she says. She sees more large corporations, from financial services to retail giants — as well as some midsize and smaller companies — offering benefits to employees caring for older family members.

Many caregivers aren’t aware that these benefits exist. More than 30 years ago, Paurvi Bhatt started caring for her parents at age 28, when her father was diagnosed with early-onset dementia. Bhatt split her time between international business travel and being with family in her native Chicago. She made it clear to her employers that caregiving was a nonnegotiable part of her life and coined the term “working daughter” as a self-identifier to open conversations with employers and colleagues.

Not every employer was supportive. “They may come across supportive until all of a sudden it’s time and you need your leave,” says Bhatt, who in 2023 launched a home-care advisory firm in Minneapolis, a year after her mother’s death.

Hutchins isn’t sure that paid family leave is the answer. She says many companies can’t afford it. But there are other things they can do. “Some of the strongest trends that we’re seeing are employers offering benefits around navigation and care coordination,” she says, citing, “flexible work arrangements, things like mental health and emotional support, emergency backup care.”

The Corporations Stepping Up

Major corporations like Bank of America and Johnson & Johnson are realizing that family caregiving affects retention. Employees leave when they don’t feel supported, says Hutchins. Incorporating eldercare into employee benefits packages is one way to retain experienced employees with institutional knowledge.

“Research from the Harvard Business School shows that for every dollar an employer spends on a care benefit to support their employees, they get $6 back in terms of healthcare savings.“

Johnson & Johnson offers a broad system of support combining leave, mental health resources, financial well-being tools and flexible working arrangements, so employees can maintain their careers and show up for the people who matter most to them, says David Berwick, the company’s head of Global Total Rewards. “We’ve evolved our approach to recognize that caregiving doesn’t stop at parenting,” he says. The company did not respond to questions about how many U.S. employees have used the paid leave program.

Small and midsize businesses are also starting to offer caregiving benefits. The trend is toward more flexible, lower-cost support like geriatric care management or emergency home care aides, rather than paid leave, according to the Society for Human Resource Management.

In addition to benefits, workplace culture needs to evolve and managers need training, not just policies, Choula says. Fear of stigma remains a powerful deterrent to disclosure. “People are afraid that they’ll be judged, that they won’t even be given the opportunity for a promotion because a manager will assume, ‘Oh, you’re caring for your mother, you’re not going to be able to focus.’”

There’s a strong business case for caregiving benefits. Research from the Harvard Business School shows that for every dollar an employer spends on a care benefit to support their employees, they get $6 back in terms of healthcare savings. “There’s some real momentum now, because we have data, we have leadership and we have some great innovative companies that are showing what needs to be done,” says Susan Golden.

Solutions at Home and Abroad

In addition to the 13 states and the District of Columbia that offer some type of paid family leave, nine others offer voluntary programs through private insurance. While the U.S. leans heavily on employer-based solutions and state-level experiments like Washington state’s WA Cares Fund, other nations offer their citizens more comprehensive solutions.

Japan, the world’s fastest-aging nation, implemented a mandatory longLong–term care insurance Term Care Insurance system in 2000. It provides universal coverage for those over 65 based on need, not income, significantly reducing the private burden on family members. Meanwhile, in Denmark, care is considered a fundamental social right. Its aging-in-place model provides municipal-level support, including everything from home help to professional nursing. It’s funded through general taxation. The focus is on maintaining the older adult’s independence, which is essential to the caregiver’s ability to remain in the workforce.

This is a huge contrast to what U.S. caregivers must go through, as planning and care fall almost entirely on families, and most aren’t prepared. Choula has some advice for caregivers and their financial advisers: “Just as you’re planning for a wedding, for your kids to go to college or your own retirement, don’t skip over what caregiving is going to look like and what caregiving is going to cost. It happens in the blink of an eye.”

She challenges financial planners to make care costs part of standard practice. “Are financial planners asking that question? Are they helping these women and other potential or current caregivers really think about what that looks like, and what the cost of that care is going to be?”

A bipartisan effort in Congress has been underway for the last two years to help family caregivers boost savings by easing Roth IRA contributions and “catch up” contributions to workplace retirement plans. But Golden says it’s not nearly enough. And it’s not even close to what other countries provide.

For now, many American caregivers must look to people like Anita Robinson, the retiree from Atlanta, for inspiration. She began investing from her very first paycheck 31 years ago and never changed the percentage, even while raising three children. That routine allowed her to tap into the nest egg when she stopped working early to care for her mother.

Robinson has some advice for employers and future caregivers: “We’re all going to be in the shoes of either being cared for or being a caregiver. The sooner we start to look at the struggle and start to address it, the better we are. Because waiting till it hits you like a freight train is not the time to start figuring out what you’re going to do about it.”

Liz Seegert is a freelance health journalist based in New York’s Hudson Valley who covers aging, policy and caregiving issues.

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DEEP DIVE