Retirement Planning for Caregivers: How to Prepare When You're Caring for Others

If you're a caregiver, you already know how quickly life can pivot. Between medication schedules, doctor visits and daily support tasks, there's little room left for thinking about your own future. But that’s exactly why retirement planning for caregivers matters more than ever.

Whether you're assisting aging parents, a spouse or a child with special needs, your caregiving role can significantly impact your income, savings trajectory and long-term goals. This article explores how family caregivers can navigate the financial realities of caregiving while working toward retirement on their own terms.

Common Financial Pressures of Caregiving

According to AARP, 63 million people in the United States are caregivers in 2025.¹ Many of these adults reduce their working hours or leave their jobs. This can lower their contributions to retirement accounts, Social Security benefits and other long-term financial resources.

But the impact goes beyond lost income. Family caregivers often spend more and save less, putting added pressure on their day-to-day budget, long-term goals and even their ability to protect the assets they’ve already worked hard to build.

This invisible gap is where retirement planning for family caregivers often falls behind. Some financial pressures to consider are:

• Lost income from reduced hours or leaving a job
• Lower lifetime earnings due to time out of the workforce
• Reduced Social Security benefits from fewer contribution years
• Fewer retirement contributions from missing employer matches or contribution years
• Greater out-of-pocket expenses related to medical bills and living support

In some cases, caregivers may take on credit card or medical debt to keep up with ongoing costs. And while the work they do is meaningful, it frequently comes at the expense of personal time, career advancement or the ability to grow retirement savings consistently.

Budgeting: A Practical First Step Toward Managing Your Money

When you're balancing doctor visits, daily care and your own responsibilities, it’s easy to lose track of what you're actually spending. But understanding your household budget is one of the most important steps in building a more secure financial future.

Track the Costs of Caregiving

Keeping a record may help you better assess how caregiving affects your finances and plan accordingly. Consider tracking:

• Medical costs: Co-pays, prescriptions, medical equipment
• Transportation: Gas, car maintenance, ride-hailing to appointments
• Lost income: Missed work hours, part-time schedules
• Household expenses: Home modifications, groceries, utilities
• Other potential expenses: Nursing homes, adult day care, home health aides, hospice

Tips to Strengthen Your Household Budget

A thoughtful, realistic household budget can help you stretch your income, protect your future and maintain progress toward growing your retirement funds, even while you care for someone else. Here are some tips that might help:

• Use budgeting tools or apps: These can help you track spending in real time.
• Review budget monthly: Your caregiving situation may change, and so might your costs.
• Separate caregiving expenses: If possible, create a dedicated caregiving category in your budget to make it easier to assess impact.
• Look for small savings: Even modest cuts, like switching service providers or reducing subscriptions, can free up funds for essentials or savings.
• Track every dollar for 30 days: This snapshot may reveal trends you didn’t notice, like frequent co-pays or rising grocery costs tied to specialized diets.

Build a Flexible Retirement Strategy

Retirement planning for caregivers isn’t just about saving. It’s about aligning your entire life, including work, caregiving and personal growth, around a flexible, evolving roadmap.

1. Create a Unified Life & Retirement Savings Plan

• Evaluate your career path: Consider whether your current role supports your caregiving responsibilities. Part-time roles or remote positions may offer more flexibility without completely sacrificing income or benefits.
• Identify long-term personal goals: Whether it’s downsizing, relocating or going back to school, these goals could influence how you allocate resources now.
• Review your benefits: If you’re employed, take stock of your employer-sponsored retirement accounts, Flexible Spending Accounts and health insurance plans.

2. Prioritize Emergency Savings

Caregiving often comes with surprises. Creating or growing an emergency fund (ideally three to six months of essential expenses) could offer some breathing room when unexpected costs arise.

3. Maximize What You Can Contribute

Even if you're not working full time, you may still have options to help build retirement income:

• Individual Retirement Accounts (IRAs): Traditional or Roth IRAs may allow you to contribute based on your earned income, or spousal income, if you're married and filing jointly.
• Flexible Spending Accounts (FSAs): Some employers offer FSAs to help with out-of-pocket medical costs, which may free up other income for savings.

4. Explore Catch-Up Contributions

If you're over 50, you may qualify for catch-up contributions to IRAs or 401(k)s. This could allow you to set aside more in the years when caregiving may stabilize or employment resumes.

How Caregiving Affects Your Social Security Benefits

Benefits through the Social Security Administration are based on your highest 35 years of earnings. Time away from work may reduce your average, but there are strategies you may want to discuss with a Social Security representative or financial professional:

• Family benefits: You may qualify for benefits based on a spouse’s or child's record.²
• Delayed retirement credits: Waiting past full retirement age may increase your benefit.

This is one area where proactive planning could potentially increase your future retirement income even if your earnings history is inconsistent.

Retirement Income Options

There’s no one-size-fits-all answer to how you’ll draw income in retirement. How you structure income later in life depends on many factors, including how caregiving impacted your career earnings. But here are common income sources caregivers may want to consider:

If you need a rough idea of how much money you'll want to save for retirement, a retirement calculator may help.

Personal Long-Term Care Planning

Many family caregivers are deeply involved in planning long-term care for loved ones. But your own future needs matter, too. Here are some options to explore:

• Long-term care insurance: This may help with costs related to nursing home care, home health care and assisted living facilities later in life.
• Health insurance reviews: Reevaluate coverage to ensure ongoing needs are met for both yourself and the person you care for.
• Estate planning essentials: Putting an estate plan in place may help protect your assets and clearly communicate your wishes. This process often includes creating a living will, drafting a living trust and assigning a health care power of attorney to make decisions on your behalf if you’re unable to do so.
• Legal documents: Alongside the estate planning process, it's generally helpful to establish durable power of attorney for financial matters and sign HIPAA authorizations so a trusted person can access medical information if needed.
• Support groups: Emotional and informational support from caregiver support groups can help you stay informed about local programs or aid.

Financial Empowerment Through Education

Building confidence around retirement planning doesn’t happen overnight, especially when you’re also managing the emotional toll of caregiving.

Where to Start

• Financial literacy programs: Many local nonprofits offer budgeting or retirement planning workshops tailored to caregivers.
• Upskilling through online education: Short courses may help you pivot to roles with more flexibility and benefits.
• Support groups: Some caregiver support groups include sessions on benefits, Social Security navigation or long-term care strategies.
• Digital resources: Platforms like the National Alliance for Caregiving or your state’s Department of Aging may offer free guides or webinars.

Finding Emotional & Financial Support

Support can come in many forms, and tapping into available resources may help ease some of the burdens caregivers often carry alone. Consider these options:

• Caregiver support groups: Support groups may offer resources, financial aid or tips.
• Local nonprofit programs: Some programs offer stipends, free supplies or part-time caregiver replacements.
• Tax considerations: You may be eligible to claim a dependent or certain tax deductions. Check with the IRS or a tax professional.

The Family Caregiver Alliance offers educational tools, state-by-state resource listings and planning guides tailored to caregivers.

Conclusion

Retirement planning for family caregivers isn't easy, but it is possible. By understanding the challenges, exploring available tools and leaning on supportive resources, you may be able to move toward a more secure future while honoring your caregiving role.

Take time to reflect on your own needs. And when you’re ready, explore retirement savings options that work with your life, not against it.

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Sources

1. Caregiving in the US 2025 – AARP. https://www.aarp.org/pri/topics/ltss/family-caregiving/caregiving-in-the-us-2025/
2. Family Benefits – SSA. https://www.ssa.gov/family
3. 401(k) limit increases to $23,500 for 2025, IRA limit remains $7,000 – IRS. https://www.irs.gov/newsroom/401k-limit-increases-to-23500-for-2025-ira-limit-remains-7000
4. The Many Faces of Caregivers – Transamerica Institute. https://www.transamericainstitute.org/caregivers