The Huge Financial Toll of Family Caregiving

“America’s family caregivers put family first, helping their parents, spouses and others stay at home,” said Nancy LeaMond, AARP Executive Vice President and Chief Advocacy & Engagement Officer. “They spend thousands of dollars every year on this care, while juggling work and family responsibilities. We urge Congress to put money back into the pockets of hardworking family caregivers by passing the Credit for Caring tax credit.”

Making sacrifices

When Maylia Tsen took on the role of family caregiver for her parents, one thing quickly became apparent: She wouldn’t be able to simultaneously keep up with the demands of her career (she’s held high-level sales/marketing positions at Pepsi-Cola, Bausch & Lomb and Sprint); the business travel, alone, made her schedule unpredictable from one week to the next. Thinking she could draw on her years of experience and generate a comparable income — with the added bonus of working flexible hours — she left the corporate world around 2005. She struck out on her own right around the time her parents relocated from New York to Laguna Nigel, California, to live near her.

More than 25 years later, she’s still caring for her now 97-year-old father (her mother died of complications from Parkinson’s in 2014), and making around 10 percent of the six-figure salary she once earned. ​​“I’ve given up a lot,” says Tsen, who works part-time as an online tutor and occasional business consultant. “All the struggles and challenges in juggling to make ends meet have been tough. I have short windows of maybe an hour or two for myself, but unless you can afford a caregiver, which is very costly, you pretty much have to be with (your loved one) all the time. I wear at least five hats at any given time.” Tsen is typically up at 7 every morning and, over the course of a typical day, helps her dad dress, provides meals, takes him to appointments and tends to his medical needs, including helping care for his diabetes-related wounds.

Maylia Tsen has been a caregiver for her father for 25 years. They recently celebrated the Lunar New Year together.

Courtesy of Maylia Tsen

Arguably the worst part: “I’ve gone through all my savings, retirement, everything,” she says. “I have to continue to work; there’s no way for me to retire.”

Tsen’s experience is far from unusual. According to a 2021 AARP report, nearly half of all family caregivers in the U.S. have experienced at least one financial setback — among the most common, dipping into their savings — due to caregiving and around one in five had to cut back on their health care spending or reduce the amount they save for retirement.

Struggling to rebound

On average, caregivers spend 26 percent of their personal income on caregiving expenses. One in three dips into their personal savings, like bank accounts, to cover costs, and 12 percent take out a loan or borrow from family or friends. Some, like Amy Goyer, run up credit card debt to meet the financial demands of caregiving.

After more than a decade of caring for her father, who had Alzheimer’s, and her mother, who had a stroke, Goyer was saddled with high-interest credit card debt. On the advice of bankruptcy attorneys and financial advisors, she ended up filing for bankruptcy in 2019, a year after her father died. Now 64, she’s still trying to rebound financially, heading toward her retirement years with no savings. “When you’re in your late 40s and 50s, you should be focused on saving for retirement,” says Goyer, AARP’s national family and caregiving expert. “I couldn’t do that. So now I’m working with a financial advisor to figure out if I can ever retire.”

“I’m an expert in caregiving — I’ve worked in this field for 40 years now — but I am not a financial expert. I kept thinking I should be able to dig out,” she says. In hindsight, she notes, “I should’ve gotten financial advice from the very beginning. I worked with my parents’ financial adviser on their financial matters and tried to be a good steward of their money, but I didn’t have anyone saying, ‘Here’s what you should do.’ ”

She’s learned the hard way that “after more than a decade of intensive caretaking, it takes years and years to recover,” she says. “I advise people to plan for a time in their life when they might be caregiving,” she says.

The balancing act of “sandwich generation” caregivers

​According to AARP research, the average family caregiver spends around $7,200 per year out of pocket on caregiving expenses, which can significantly drain their finances. Many spend much more.

The financial toll is especially difficult for the estimated one in three family caregivers caught between covering the costs of caring for an aging parent and their own children. As part of the ever-broadening “sandwich generation,” Dana Bice was covering private school and then college tuition for his daughter while helping to care for his aging mother, who died last year at age 88. In 2023 alone, Bice says he paid more than $162,000 out of pocket to have round-the-clock, at-home care for his bedridden mother.

“She did not want to go to a nursing home, and she was pretty adamant about that,” says Bice, 65, who works as a sales rep for a truck parts dealership in Baton Rouge, Louisiana. He eventually moved into his mother’s home not only to help with her care but also to help defray costs. “As a result, she died in her own bed.”   

In Bice’s way of thinking, that should be the norm, not the exception. “The government should pay for caregivers for the homebound elderly who are in the last years of their life,” he says. “If we had liquidated all my mother’s assets, the government would’ve paid for a nursing home, but they wouldn’t have paid to keep her in her own home.”

That’s the challenge, says O’Reilly. “We don’t have a sustainable long-term care system and so we’re relying on family caregivers to not only hold up their families and their loved ones, but also the long-term care system itself,” she says. “As we look at those economic decisions and those challenges — whether retirement or reduced retirement savings, employment choices and the ripple effect that that all has, that is significant. That’s why the focus on providing meaningful relief is so urgently needed because that’s what caregivers need.”​​Ultimately, she adds, “everyone has been, will be or will need a family caregiver.”

Editor's note: This story has been updated to reflect the reintroduction of the Credit for Caring legislation.