Planning for the Financial Impact of Caregiving

 

Caregiving may be one of the most important things you do. But without proper preparation, it can become emotionally and financially draining, especially for women. The statistics bear this out: Of working parents, 61% say their career ambitions have dimmed because of childcare obligations, with 60% of mothers saying they feel overwhelmed balancing the two, compared to just 42% of fathers.¹

 

Also, care doesn’t just mean kids: Unpaid elder care is attributed to a 2-4% reduction in women’s labor force participation.² This can mean caring for elder relatives, like parents—a common scenario. Women are over 50% more likely to do this than men.³ Or, as you age, it can mean caring for an aging spouse. Women take care of an elderly male spouse at over double the rate that men take care of an elderly female spouse.³

 

And this doesn’t even cover the sandwich generation: Mid-career individuals who take care of their children and their elderly parents. Of this cohort, 67% of individuals have acknowledged that the strain of these responsibilities has caused them to consider leaving their job.¹

 

So, what can you do? Let’s unpack each of these scenarios from a financial perspective. 

How to Plan Financially for Childcare

As any parent knows, childcare is expensive and hard to find. In fact, many regions have fewer childcare options than children who need care⁴—and the cost of childcare has risen at twice the rate of inflation since August 2024.²

 

From a financial perspective, maintaining momentum in your career almost always leads to long-term financial value, even if you’re breaking even or losing money in the short-term by paying for childcare. However, this depends upon there being suitable care available that aligns with your non-financial goals.

 

From a practical perspective, saving beforehand and being prepared to pay a premium to secure childcare for a short period of time may make long-term financial sense. This is particularly the case for women who highly value their careers and aspire to (or already are in) executive-level positions. The opportunities of advancement and status (and their long-term economic benefit) can be very valuable.

 

Additionally, unlike many caregiving responsibilities that can arise unexpectedly later in life, childcare costs and schedules often follow a more predictable path. As those demands change over time, families may gain additional financial flexibility. A Wealth Advisor can help evaluate how that flexibility might be used, whether it’s to support new family priorities or strengthen long-term financial security.

 

Ultimately, the decision is highly personal and depends on your unique priorities, values and financial circumstances. For some, continuing to work may support long-term financial goals, while others may choose to step back or adjust their careers to spend more time with their children during key developmental years. Understanding the financial implications of each path can help you make informed decisions that align with your goals.

How to Plan Financially for Elder Care

Elder care varies from childcare in two crucial ways: First, the timing is unclear. While most people are likely to need some kind of long-term care at the end of their life,⁵ when that happens is not fully predictable, nor is the shape of the care needed known beforehand. The lack of a clear timetable and a clear price tag can feel overwhelming—and lead to a lack of planning.

 

Second, elder care differs from childcare in that the person being cared for has had a financial life themselves. How they’ve managed it and the plans they’ve made will directly affect your finances and the caregiving decisions available to you.

 

Preparing for the possibility of future caregiving often starts with a conversation. Discuss financial resources, healthcare preferences, living arrangements and legal documents with aging loved ones, so you can help create a clearer picture of what support may be needed in the years ahead. While these discussions can be uncomfortable, they are an important part of planning for both the expected and unexpected. Several key considerations can help guide the conversation.

 

Know the type of care the person wants. Some people want to age in place, with in-home care as an option as their needs change. Others may hope to move in with family members or receive care in a loved one’s home. Some look forward to moving to a senior living community that offers a continuum of care, from independent living to around-the-clock support, while others prefer to remain at home for as long as possible. Understanding these preferences can help set expectations and guide planning conversations. It’s also important to consider whether those expectations align with the financial resources, care options and the support available to everyone involved. 

 

Review their Financial Power of Attorney and Healthcare Directive. While you may be serving—or planning to serve—as your loved one’s caregiver, it’s important to ensure that their legal documents formally authorize you to act on their behalf when needed. Review their Powers of Attorney, Healthcare Directives and other estate planning documents before they are needed, which can help you avoid unnecessary challenges later.  

 

Assess the resources available. Understanding your loved one’s financial picture can help inform planning conversations. For example, they may have savings, retirement assets, insurance policies, annuities or other resources that could help offset the cost of care. It’s also helpful to understand your own financial capacity and any limitations you may face as a caregiver. Long-term care can be expensive, particularly when a higher level of support is needed over an extended period, making it important to discuss how expenses might be funded. As part of these conversations, be aware that Medicare does not cover long-term care. Medicaid may help cover certain long-term costs, although eligibility requirements vary by state and can affect available care options. If you’re considering Medicaid as an option, the rules can be complex, so it’s worth consulting an attorney or another qualified professional who specializes in elder care and Medicaid planning.

 

These are not one-and-done conversations. Expect to sit down several times with your loved ones. You may also want to include a scheduled conversation with a lawyer and your Wealth Advisor, so that you receive the benefit of a professional consultation as well.

The Sandwich Generation: It’s a Tough Spot

Caring for both those younger and older than you can be extremely challenging, even in the best of circumstances. If this describes you, know that you are not alone. According to a recent study, more than half of Americans in their 40s are caring for both their children and an aging parent.⁶

 

While the situation is temporary, the emotional and financial strain can be immense. Don’t be afraid to enlist help. Talk with friends and family about your needs and work with those willing to help develop a comprehensive plan for care. Loop in your Wealth Advisor to review your finances and understand all your options. Be open with your boss and colleagues about the strain you’re under—and the temporary flexibility you may need.

 

Lastly, don’t forget to take care of yourself and keep your own house in order. Do you have a Will, Financial Power of Attorney and Healthcare Directive? Does a revocable trust make sense for your situation? Could life insurance play a role in supporting your overall financial plan?

A Team Approach Is Better

Wealth Advisors, estate attorneys and tax advisors regularly work with clients who are (or plan to be) caregivers. Use their wisdom and experience to your advantage. They have seen a lot—and likely they have suggestions and options you may not have considered. If you’d like to get started, we’re here to help. Please just reach out.

 

¹ “Our 2026 Cost of Care Report: What HR Leaders Need to Know,” by Care.com. Accessed on September 30, 2026. Available at: https://www.care.com/benefits/2026-cost-of-care-report-what-hr-leaders-need-to-know/

² “The workforce shift employers can’t ignore: Caregiving pressures and the Great Exit,” by Care.com. Accessed on September 30, 2026. Available at: https://www.care.com/benefits/the-workforce-shift-employers-cant-ignore-caregiving-pressures-and-the-great-exit/

³ “Unseen Costs: How Providing Eldercare Impacts Work and Economic Security,” Generations Journal. Published October 22, 2025. Accessed online on September 30, 2026. Available at: https://generations.asaging.org/unseen-costs-how-providing-eldercare-impacts-work-and-economic-security/

⁴ “The Child Care Gap,” by The Child Care Trust. Interactive report accessed online on September 30, 2026. Report available at https://childcaregap.org/report

⁵ “Long-term care statistics: Costs, who needs care, and key trends,” The Checkup. By Vanessa Ling. Published August 13, 2026. Accessed online on September 30, 2026. Available at https://www.singlecare.com/blog/news/long-term-care-statistics/

⁶ “More than half of Americans in their 40s are sandwiched between an aging parent and their own children,” by Juliana Menasce Horowitz. Pew Research Center. Published August 27, 2026. Accessed online on September 30, 2026. Available at https://www.pewresearch.org/short-reads/2026/08/27/more-than-half-of-americans-in-their-40s-are-sandwiched-between-an-aging-parent-and-their-own-children/