Is a Caregiving Strategy — for Yourself and Others — Missing From Your Retirement Plan?

U.S. retirees often become both givers and receivers of care and financial support. Usually, they are providers early in their retirement and end up as the recipients as they grow older and possibly outlive their retirement funds.

People don't often include these situations in their retirement planning. Understanding how retirees might find themselves giving or receiving help, and then figuring out how to prepare for it, can protect retirement security.

Providing care and support in retirement

A growing percentage of U.S. retirees care for family members. A 2025 AARP/National Alliance for Caregiving survey estimates 63 million Americans provide care for loved ones with serious health issues without pay.

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Most of these caregivers are over 50, and about 22% are 65-plus. This unpaid care is typically for a spouse, sibling or parent with a chronic health condition, disability or functional limitation.

Grandparent caregiving is also becoming more common. About a third of the 6.7 million grandparents living with grandchildren are responsible for their care, according to the 2021 U.S. Census.

Additionally, retirees often help loved ones financially after a health event, job loss or divorce upsets their lives and causes financial stress. Many retirees also assist with college costs or special-needs care. And, as people live longer, they financially support their own aging parents when they outlive their savings.

Do retirees feel prepared?

The Society of Actuaries (SOA) Research Institute 2024 Retirement Risk Survey found that 84% of retired respondents felt ready for medical emergencies, while 87% felt ready for funerals and 59% for support during challenging times.

However, household income influenced the findings, and retirees who earned $100,000+ annually reported being prepared for supporting family members at much higher rates than their less affluent counterparts.

For example, while 66% of these respondents felt prepared to support their family during challenging times, 40% of those who made between $50,000 and $100,000, and only 30% of retirees who made less than $50,000, felt the same.

While planning for family support can help protect retirement security, the rates of retirees taking precautionary actions were uneven:

• About 40% said they have regular family discussions to plan for unexpected expenses
• 36% reported saving for unforeseen family needs
• 31% have used financial planning services to plan for these costs
• 24% have diversified investments
• 5% stated they pooled or combined assets with other family members

Generosity needs a plan

Retirees who are caregivers or financial supporters often find fulfillment in helping loved ones, but it can also be stressful. They may neglect their own health, and giving away too much money can endanger retirement funds.

Often, retirees find themselves providing care or financial support because of unplanned events that happen to their family. Because the impacts on retirement security can be profound, it's advisable to plan for these risks as much as possible.

The first step is for the retiree to talk with family members about their expectations. Part of that conversation should include backup plans in case the retiree becomes incapable of providing care.

It is also important for retirees to consider the feasibility of helping family members financially. For example, if a retiree wants to provide financial gifts to loved ones or pay for college, it should be done carefully to ensure the retiree can maintain financial stability throughout their retirement.

Additionally, it's advisable for retirees to have an emergency fund for the possibility of unexpected events that impact loved ones. They should also stress-test their plan before giving recurring help: Take into account market downturns, inflation and a long lifespan.

Expectations of care and financial support

As retirees age, they might need help with errands, appointments, medications and money management, or they might require simple companionship. This help most often comes from family. In fact, about 70% of people receiving family caregiving in the U.S. are 65 or older.

The 2024 Retirement Risk Survey found that 78% of U.S. retiree respondents expect strong or moderate levels of support from family or friends, with 58% saying they expect this support to come from their children, 28% from siblings and 18% from extended family members.

It's also not unusual for older family members to receive financial assistance from loved ones, especially adult children. Often, the need for support happens when the retiree loses a spouse, which can affect retirement income.

However, most retirees don't expect to need financial support from their family. Responses to the 2024 Retirement Risk Survey reveal the following:

• 49% expect no support
• 26% expect minimal support

Expectations vary by type of household:

• 30% of single retirees who live with family expect at least moderate financial support
• 20% of retired couples living with children expect the same
• 15% of single retirees living alone expect financial assistance from family members

The importance of planning ahead

While family is a major source of care for retirees, many people don't prepare for this circumstance, and when needs arise, it can disrupt loved ones' lives. Both physical care and financial support can put stress on a caregiver's job and finances, resulting in lost wages and Social Security benefits, and lower retirement savings.

Also, just as the stress of caregiving can affect retirees, it can also impact younger caregivers' physical and mental health.

Even before retirement, people should talk with family members to ensure they know where to find important financial and legal documents, such as power of attorney, advance directives and wills.

Retirees should also plan where they're going to live if they need assistance and who will be part of their support network.

Retiring couples should consider what happens to retirement income (e.g., Social Security survivor benefits and pensions) when one member dies. Surviving spouses and unmarried retirees should also take into consideration the aging of their support network.

For example, by the time a retiree needs care, the people they planned to rely on themselves might be incapable.

In short, it's important to have backup plans when it comes to care or financial support later in life.

For many Americans, family is central to retirement. Working with loved ones to identify roles, set boundaries and save for surprises can protect retirees' well-being and their nest egg, and give their loved ones peace of mind.

You may find the following retirement planning resources from the SOA Research Institute useful:

• Managing Post-Retirement Risks: Strategies for a Secure Retirement
• Understanding and Managing Post-Retirement Risks

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