The Impact of Caregiving: From a Financial Advisor

During the COVID-19 pandemic, millions of Americans found themselves taking on the role of caregiver for the first time. Women, in particular, shouldered the majority of this responsibility, often stepping away from their careers to care for aging parents or young children. Now, years later, many are grappling with the long-term effects—financially, emotionally, and professionally.

Where Are Caregivers Now?

For those who reduced work hours or left their jobs entirely, the financial toll has been significant. Many are only now realizing the impact on their retirement savings, career trajectory, and overall well-being. According to a Fidelity Investments study on American caregivers, over 75% of respondents stated they willingly took on caregiving despite its challenges. But now is an opportune moment to reassess and create a strategy that prioritizes both their well-being and financial stability.

Navigating the Emotional and Financial Toll

The burden of caregiving falls disproportionately on women, with nearly three-quarters of surveyed caregivers identifying as female. More than half of them admitted their decision was largely driven by emotions, with 83% feeling they had no other choice. The responsibilities are immense—caregivers reported spending an average of 61 hours per week tending to children and 28 hours per week caring for adults.

Such demands make maintaining a career difficult. One in four caregivers for adults left their jobs, took a leave of absence, or shifted to part-time work. Even those who stayed employed often passed up promotions or job opportunities due to caregiving obligations.

The Hidden Financial Costs of Stepping Away

Leaving the workforce brings more than just lost wages. It also means missing out on:

●      Employer-sponsored retirement contributions (e.g., 401(k) matches)

●      Health insurance and health savings account (HSA) contributions

●      Tuition assistance and professional development

●      Employee stock purchase plans and financial wellness programs

Despite these financial setbacks, only a third of caregivers in the study fully understood the monetary impact of their decision beforehand. Unsurprisingly, 62% reported feeling overwhelmed by financial stress.

Building a Caregiving Roadmap: A Family Effort

Caregiving is a team effort, and open discussions among family members can help distribute responsibilities. Key questions to consider include:

●      How will day-to-day care be managed?

●      Who will cover the costs of caregiving?

●      How will a loved one's home and finances be maintained?

●      What medical or legal preparations (wills, power of attorney) are necessary?

●      How can caregivers balance work, personal life, and caregiving?

A well-structured financial plan is essential. Understanding current expenses, savings, and long-term financial goals can help caregivers make informed decisions. Whether working with a financial professional or independently, reviewing health care costs, insurance coverage, savings strategies, and estate planning can provide clarity and peace of mind.

Reducing Stress Through Planning

Caregiving is physically, mentally, and financially demanding, but having a solid plan can ease some of the burden. While only 15% of caregivers in the study had a formal roadmap, nearly 75% of those who didn’t said they wished they had, believing it would have alleviated much of their stress.

Seeking Support and Practicing Self-Care

One of the most crucial lessons experienced caregivers share is this: Don’t be afraid to ask for help. Whether it’s delegating responsibilities to family members, exploring workplace benefits, or seeking professional financial advice, support is available. Equally important is prioritizing self-care—carving out time for mental and physical well-being helps caregivers sustain their ability to provide care over the long term.

Final Thoughts

Caregiving is a profound and meaningful responsibility, but it shouldn’t come at the cost of a caregiver’s own well-being. By planning ahead, leveraging available resources, and seeking support, caregivers can navigate their journey with better financial stability and peace of mind. Whether you are currently providing care or preparing for the future, taking proactive steps today can lead to a healthier, more balanced tomorrow.

Sources:

https://www.fidelity.com/learning-center/personal-finance/retirement/hidden-costs-of-caregiving

Disclosures:

This information is an overview and should not be considered as specific guidance or recommendations for any individual or business.

This material is provided as a courtesy and for educational purposes only.

These are the views of the author, not the named Representative or Advisory Services Network, LLC, and should not be construed as investment advice. Neither the named Representative nor Advisory Services Network, LLC gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your Financial Advisor for further information.