Caregiving Is a Stealth Retirement Expense for Women: I Should Know
Eldercare takes a toll on everyone, but women's careers tend to suffer more — with dire consequences over the long term.
In 2021 I decided to quit my steady, full-time, well-paid job and return to freelancing. My choice wasn’t impulsive or rash. But you wouldn’t know it from the way some people reacted — with variations on: Have you lost your mind?
Well, yes, I had.
That summer, my dad was turning 90, and every other minute he (and his equally elderly dog) needed — something. A prescription. A doctor’s appointment. A walk. A meal. Company.
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At the same time, my son was about to start actual in-person high school, after missing 9th grade owing to Covid (and the lamest Zoom-schooling you can imagine). No one was prepared.
Like many caregivers trying to juggle everything, plus a demanding job — I felt that something had to give. So, with the stroke of an email I resigned, and became a statistic: one of the 37 million unpaid caregivers who watch over an adult 65 or older, according to data from the Bureau of Labor Statistics (BLS). Of those caregivers, some 22 million, or almost 60%, are women — most of whom are between the ages of 45 and 64.
Caring for someone who’s older is hard, whether you’re male or female. And clearly millions of men are also in this boat. But the long-term economic consequences for women tend to be much more severe, for many reasons. Chief among them is the financial timing of when women step into (or fall into) an eldercare role, according to a study by Samantha Brady, research specialist at the MIT AgeLab and PhD student at Brown University.
The double caregiving penalty
‘Financial timing’ may not sound alarming. But women become caregivers, on average, at around age 52 — and that’s a critical period in the lead up to retirement. As Brady notes in her study, which examines women’s employment patterns when they first transition into caregiving, it’s not that women tend to quit their jobs or cut back their hours. It’s more like they slowly lose financial ground, at the very moment when there should be a series of gains.
“What I found is that, in the transition into parental caregiving, women’s wages tend to stagnate relative to non-caregivers,” Brady said in an interview. “It may be they’re not pushing for the raise or the promotion — or they may be passed over, owing to the stigma around caregiving.
“But this transition often occurs at midlife, when a lot of women are at their peak earning years, and it can have a significant impact on their long-term financial security.”
Wouldn’t men of a similar age face a similar outcome? In some cases, male caregivers may take a financial hit. But the data doesn’t support this as a general trend among men. Just as women tend to endure a motherhood penalty in terms of lost wages and stalled career growth when they’re younger — men, if anything, get a bit of a fatherhood bonus.
“Essentially we see a double penalty for women in terms of this persistent gender pay gap — where it may hit you in motherhood, and it will hit you again if you become a parental caregiver,” Brady says.
Connecting the dots and the numbers
While the financial penalties associated with caregiving are well known — about 45% of caregivers experience some kind of financial setback, whether that’s struggling with bills or falling into debt — the broader context of a woman’s financial life is what’s most germane here.
Because, for women, the economic impact of caregiving doesn’t happen in a vacuum.
Due to the fact that women earn less than men (still), they tend to save less, and end up with about 30% less saved for retirement, according to the TIAA Institute. That’s a tough swallow, given that women tend to live three to five years longer than men do — and also need to cover the expenses of their own much-longer lives.
Also: these numbers refer to the broader population of women in the U.S. When you look at the predicament of women of color and LGBTQ+ individuals specifically, the financial strain is even greater.
What’s worse — and often left out of this conversation (I don’t know why) — is that when a woman’s income takes a hit, it’s likely her Social Security benefit will too, because that payout is based on an individual’s earning history. For example, in 2022, the average monthly Social Security check for women 65 and older was $1,638 versus $2020 for men: almost 20% less.
Until now, the discussion about this retirement gap has focused primarily on the fact that women tend to earn and save less, on average. (Women can also be more conservative investors, but that’s for another story.)
But it’s not just a matter of the old women-earn-78-cents-versus-a-dollar-for-men. Brady’s report cements a crucial point, raised by other researchers as well: that women pay a much heavier price when they become caregivers, especially at midlife — and especially when they’re caring for older adults, who often suffer from long-term chronic conditions, with few social supports.
In short, for millions of women, caregiving has become a stealth factor undermining their ability to retire and potentially their long-term financial security.
In Lieu of a Magic Wand …
It’s not easy to suggest next steps for a problem that isn’t so much one problem as it is a series of long-standing, interlinked, systemic issues. But here goes.
1. Respect the odds.
They say awareness is the first step. So if you’re a woman of a certain age, with parents of a certain age, that doesn’t guarantee that you’re on the fast-track to becoming a caregiver. But to have more control over your own financial future, it helps to open your eyes about what the odds are.
“We know that a fifth of people in the U.S. in any year are caregiving for an adult — which is huge,” Brady says. “So you might not think it's going to be you, but these shocks happen, and chances are many women will be caregivers.”
2. Start talking.
Beth Pinsker, CFP®, a columnist for MarketWatch and the author of “My Mother’s Money,” a forthcoming book about her own experiences as a caregiver, is all about breaking the silence. “We talk about the emotional burden of caregiving. We talk about the physical needs of caregiving. We talk about the mechanics of caregiving,” Pinsker says. “But we don’t really talk about what happens financially when you get thrown into a caregiving role.”
Speaking up about the insane and unpredictable nature of caregiving expenses — to friends, family, co-workers, financial professionals, anyone with a sympathetic ear — could help get you support and information that may help. Just as important, giving voice to financial stress will help other women to recognize this is not, or shouldn’t be, their burden alone.
Even if you have the resources to cover what an older loved one might need, “money is flying out the door in sums you don’t normally see in real life,” Pinsker says. Don’t shrug off those expenses, or power through hoping it will “all come out in the wash” — if that will put your security further at risk.
3. Accelerate your own financial plan.
Most people drag their feet when it comes to checking all the boxes for their financial plans (a.k.a. inertia). But women who are caregivers may want to think further ahead, or get help from a financial adviser — hire a professional who charges by the hour, if you can.
I hate to trot out the standard-issue personal finance advice to pay down or avoid debt; put money aside for an emergency; fund a retirement account — but do all that and do it sooner, because later might come with a firehose of competing priorities.
4. Keep your job.
I stand by my decision back in 2021; leaving my job was the right move at that point. But Brady says that staying employed may offer an upside for some caregivers. In addition to keeping yourself on an even keel financially, “there is evidence that keeping your ties to work is protective of your mental health.”
Even when the juggle gets overwhelming, and it may, having a place to go where you’re not a caregiver, having a network of co-workers who bring out your non-caregiver self, can be beneficial.
5. Sort out the powers that need to be.
Dealing with your own finances is complicated enough — but having to manage your parents’ money or financial plan can be mind-bending (especially if there are siblings or other family members involved).
So while you may not be able to sort out all the wills and trusts and estate plans, you can take a relatively non-controversial step “and make sure all the adults in your realm have a valid power of attorney document that you can access if you need to care for anyone,” Pinsker recommends.
Without the proper powers-of-attorney and a health care proxy, taking action when you need to can become nightmarish, and potentially expensive.
And while you’re at it, do the same for yourself. And tell a friend.
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