Caregivers Lose $7K Yearly—New Bills Could Change That

Last Tuesday, my neighbor Sarah finally sat down after putting her kids to bed, only to spend the next two hours on the phone coordinating her mother’s doctor appointments. She’d already taken three days off work this month to drive her dad to physical therapy. When I asked how she was doing, she laughed tiredly and said, “I’ll figure out my own retirement someday.”

Sound familiar? If you’re part of the sandwich generation—caring for aging parents while raising your own kids—you’re not alone. And here’s the financial reality that keeps people like Sarah up at night: family caregivers in America provided nearly $1 trillion in unpaid care in 2024. That’s trillion with a T, and almost none of it compensated.

The Hidden Retirement Crisis Nobody Talks About

Here’s what makes this personal. According to AARP research, 78% of family caregivers report out-of-pocket spending related to caregiving, with an average annual outlay of $7,242. That’s money that could be going into your 401(k). That’s your kids’ college fund. That’s your emergency savings slowly draining away while you’re busy being a good son, daughter, or spouse.

But the costs go deeper than just dollars spent. Many caregivers reduce their work hours or leave jobs entirely to provide care. Every year out of the workforce means:

• Lost income and career advancement opportunities
• Reduced Social Security benefits down the road
• Missed employer 401(k) matches
• Years of compound growth that can never be recovered

Finally, Washington Is Paying Attention

Here’s the hopeful news: new bipartisan bills in Congress are specifically targeting this retirement gap for caregivers. While the details are still being finalized, the proposals focus on helping caregivers continue building retirement savings even when traditional employment isn’t possible.

This matters because it acknowledges something families have known forever: caring for loved ones IS work. It’s valuable. And the people doing it shouldn’t have to sacrifice their own financial futures.

What This Means for Your Family Right Now

Whether or not these bills pass, here’s what you can do today if you’re balancing caregiving with your own family’s financial goals:

1. Track your caregiving expenses religiously. Many families don’t realize how much they’re spending until they add it up. Keep receipts, log mileage, and document time off work. This information is crucial for tax purposes and for making informed decisions about your care arrangement.

2. Explore spousal IRA contributions. If caregiving has reduced your income, a working spouse can contribute to an IRA in your name. For 2024, that’s up to $7,000 (or $8,000 if you’re 50+). Don’t leave this money on the table.

3. Have the money conversation with siblings. I know—it’s awkward. But if you’re the primary caregiver, it’s fair to discuss how caregiving responsibilities (and costs) are distributed among family members. Sometimes siblings can contribute financially even if they can’t contribute time.

4. Look into respite care options. Burning out doesn’t help anyone. Many communities offer subsidized respite care programs that can give you time to work, rest, or simply be present with your own kids.

The Bigger Picture for Your Family

Here’s what I want you to remember: if you’re caring for an aging parent while raising children, you’re doing something incredibly difficult and incredibly important. The financial system hasn’t caught up to recognizing that value—yet.

These new bills represent a shift in how we think about caregiving and retirement. Whether they pass in their current form or not, they’re starting a conversation that’s long overdue.

In the meantime, protect yourself. Document everything. Maximize the retirement tools available to you. And don’t be afraid to ask for help—from family, from your community, and yes, from the financial system that should be supporting you.

Because your retirement matters too. Your kids are watching how you handle this season, and someday, they might be in your shoes. Let’s build a future where caring for family doesn’t mean sacrificing your own security.