Balancing Caregiving and Career: How to Protect Your Income While Caring For Aging Parents
Caring for aging parents is a responsibility many professionals in their 40s, 50s, and 60s take on. As members of the sandwich generation, they find themselves balancing full-time careers, raising children, and managing their own financial goals—while also ensuring their parents receive the care they need.
But caregiving comes with financial consequences. Nearly half of caregivers experience a financial setback due to caregiving responsibilities. Whether it’s cutting back on work hours, missing out on promotions, or covering unexpected care costs, the financial impact can ripple through their savings, retirement planning, and long-term wealth-building strategies.
If you’re navigating this challenge, the good news is that you don’t have to choose between caring for your loved ones and securing your own financial future. With the right strategies, you can support your parents while protecting your career, income, and financial planning goals.
How Can Caregiving Affect Your Career and Finances?
The biggest financial risk caregivers face is income disruption. Many people reduce their work hours, switch to a less demanding (and lower-paying) role, or leave the workforce entirely to care for a parent. This loss of income can impact:
- Earning potential – Fewer work hours or stepping away from a high-growth role can mean a lower salary trajectory over time.
- Retirement savings – A pause in investment management contributions can limit the growth of your nest egg.
- Social Security benefits – Benefits are based on your highest-earning years, so lower earnings during peak career years can reduce future payouts.
- Health insurance and benefits – Moving to part-time status or stepping away from a job may mean losing employer-sponsored benefits.
At the same time, caregivers often take on additional expenses, from paying for medical co-pays to covering home modifications to make aging in place safer. AARP research found that family caregivers spend an average of $7,242 per year out of pocket on caregiving-related costs. When combined with income loss, these financial strains can make it harder to maintain a solid wealth management strategy.
How Can You Financially Prepare for Caregiving Costs?
One of the best ways to manage the financial impact of caregiving is by planning ahead. Start by assessing your parents’ financial situation and having open discussions about their care preferences, assets, and available support.
Some key financial steps include:
- Reviewing long-term care options – Whether aging in place, assisted living, or home health care is best, planning for long-term care costs now can help avoid financial surprises.
- Exploring tax breaks for caregivers – Some caregiving expenses may be tax-deductible, and you might qualify for the Dependent Care Credit or other tax relief options.
- Considering insurance options – If your parents don’t have long-term care insurance, you may need to explore Medicaid planning, hybrid life insurance policies, or alternative funding strategies.
A financial advisor can help you evaluate the best approach for balancing these costs with your own financial goals, ensuring you don’t derail your retirement planning or estate planning efforts in the process.
How Can You Protect Your Retirement While Caregiving?
Caregiving can feel all-consuming, but it’s essential not to lose sight of your own future. Too often, caregivers focus so much on providing for their parents that they neglect their own financial well-being.
To stay on track with retirement planning, consider these steps:
- Continue making retirement contributions. Even if you need to reduce the amount, don’t stop contributing entirely.
- Reassess your investment strategy. If caregiving affects your income, your investment management approach may need adjustments to align with new financial priorities.
- Avoid dipping into savings. Using retirement accounts or education planning funds for caregiving costs can have long-term consequences.
If you’re feeling financially stretched, working with a professional can help you build a strategy that balances your caregiving responsibilities with long-term financial security.
How to Care for Your Parents Without Sacrificing Your Financial Future
Caring for aging parents is an emotional and financial challenge, but with proactive financial planning, it’s possible to support them while protecting your income and long-term wealth.
By leveraging employer benefits, planning for caregiving costs, and prioritizing your retirement planning, you can provide for your parents without putting your own financial future at risk.
If you need guidance on creating a wealth management strategy that accommodates your caregiving responsibilities, we’re here to help. Reach out to schedule a consultation to develop a plan that ensures financial security for both you and your loved ones.