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A financial roadmap for caregiving

Key takeaways

  • A caregiving roadmap for success can include building out a financial plan and knowing how and when to ask for help from others—both at home and at work.
  • When caregiving needs become front and center for the family, it's important to map out the roles and responsibilities of other family members involved.
  • Understand the hidden financial cost of leaving the workforce and the adverse impacts it may have on potential raises and promotions, or participating in a variety of important employee benefits.

Millions of Americans became caregivers for the first time in their lives during the COVID pandemic. With women making up the vast majority of new caregivers, many say they found themselves with no other choice than to put work aside and care for their aging relatives or young children.

Where are they now? Many who reduced their work hours or left the workforce entirely took a big financial hit, including to their retirement savings—and are just starting to understand the impact on their financial goals, social life, mental health, and career.

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According to the Fidelity Investments® American Caregivers study,1 more than three-quarters of respondents say making the choice to provide care was something they wanted to do regardless of the challenges or downsides.

"With the US emerging from the grips of the pandemic, now may be the ideal time for caregivers, especially those juggling work and family demands, to hit the reset button and find ways to lower their stress levels and tend to their own mental well-being," says Meredith Stoddard, vice president of education and Life Event programs at Fidelity Investments.

The good news: The data suggest such a reset is possible, if caregivers ask for help, both at home and at work, and mindfully build a roadmap for success—one that includes a financial plan.

The emotional and financial impact of caregiving

The study, which examines awareness and management of the emotional and financial costs of caregiving, also finds nearly 3 in 4 respondents identified as female, validating that women disproportionately bear the burden of caregiving in the American family model.

No surprises there.

More than half of respondents say from the start, the decision to become a caregiver was a mostly emotional rather than a practical decision, with 83% saying they felt they had no other choice but to assume the responsibilities.

"Unless you're in the thick of providing care, you may not realize the impact the experience can have," says Stoddard. "When a member of the family takes on caregiving responsibilities, others may not realize the true toll it takes. Awareness and communication are critical elements to a successful support system that benefits both the cared-for and the caregiver."

By far, the impact to your career can be one of the most difficult issues caregivers grapple with, says Stoddard. According to the survey findings, caregivers reported providing an average of 61 hours per week to care for children and 28 hours per week to care for adults. These obligations clearly make continuing work responsibilities difficult, and according to the survey findings, more than one-quarter of caregivers for adults left a job, took a leave of absence, or shifted to part-time work in order to provide care.

However, even for those who took short-term leave or didn't leave at all, one-fifth say they've turned down or elected to not pursue work opportunities because it would have interfered with their caregiving responsibilities.

For those whose circumstances compelled them to step away, the decision brought with it a host of financial challenges.

Graphic show the impact of caregivers stepping away from the workforce. 53% say their time away was longer than expected. 37% say they earned less money once they returned to work.
For illustrative purposes only. Source: Fidelity Investments 2021 American Caregivers Study

The hidden cost of leaving the workforce

The decision to leave the workforce brings with it other "hidden" financial costs, including the adverse impact it may have on potential raises and promotions, or participating in a variety of important financial employee benefits such as:

  • 401(k) or workplace savings program (with an employer match)
  • Health insurance coverage and employer contributions to health savings accounts (HSAs)
  • Tuition reimbursements
  • Employee stock purchase plans
  • Financial wellness coaching

According to the study findings, just one-third (32%) fully understood the potential financial impact of caregiving, and perhaps as a result, 62% indicate they sometimes felt overwhelmed by the financial stress.

"Many people overlook the opportunity to seek out help from their employer and take advantage of a number of employee benefits, which may include greater flexibility, as well as financial and emotional support benefits," says Stoddard.

Graphic lists employee benefits to ask your employer about such as the Family Medical Leave Act, early retirement, and work from home options.

An effective caregiving roadmap requires clear roles and responsibilities

When caregiving needs become front and center for the family, it's important to map out the roles and responsibilities of other family members involved. Sometimes, hard and honest conversations may be required to help answer some of these common caregiving questions and challenges:

  • How to manage all of the day-to-day aspects of providing care
  • How to pay for costs associated with providing care
  • How to maintain the home or apartment of a loved one
  • How to manage the finances and pay the ongoing bills of a loved one
  • How to manage medical or health needs in providing care
  • How to balance work responsibilities vs. caregiving responsibilities
  • How to set up legal documents, including wills or powers of attorney
  • How to take care of your own mental health while providing care

An important part of caregiving roadmap is having a financial plan. Understanding your current financial position can provide a solid foundation for your financial planning process. Knowing how much you spend and save can provide some key insights into your financial health. So whether you work with a financial professional or on your own, it's important to review the basics of financial planning, like your health care expenses, life and auto insurance, college savings, will, and more.

Having a plan in place can help lessen the mental stress

Caregiving is stressful: physically, financially, and mentally. But having a plan can help reduce the worry and anxiety that many caregivers feel. While only 15% of respondents indicated they actually put a roadmap together, about 75% of those who didn't say they wish they had, feeling it would have reduced their stress levels.

Bottom line: At every stage of the caregiving process—from deciding how to provide care, to the point at which caregiving is no longer being provided—those with a roadmap for caregiving found the experience far less mentally stressful.

"People who planned for caregiving said they had more time to focus on other important things in their life, in part because they had built a strong support system. They even described the overall caregiving experience as rewarding and joyful," says Stoddard.

Getting help: Don't be afraid to seek out assistance

When it comes to offering caregiving advice, experienced caregivers agree: Whenever possible, make planning for care a family affair, and don't be afraid to ask for help. Other top advice:

Graphic gives suggestions on ways that caregivers can get help, including ways to focus on self care, get your family involved, and get social support.
For illustrative purposes only. Source: Fidelity Investments 2021 American Caregivers Study


To manage the stress of caring, take care of yourself and don't be afraid ask for help when you need it. "This begins with finding time for self-care, something that isn't always easy for caregivers to prioritize. Delegating responsibilities to other family members can help, too," says Stoddard.

"Lastly, remember that proper financial planning can make a profound difference, too, at every stage of the caregiving journey," she concludes.

A few Fidelity resources to help you plan and thrive:

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1. About the Fidelity Investments 2021 American Caregivers Study: The study presents findings from a nationwide survey of 1,008 U.S. adults ages 18+ who are current or past (within last 5 years) caregivers to children or adults. This survey was fielded in April 2021 by Versta Research, an independent research firm not affiliated with Fidelity Investments. Caregivers to adults provided at least 5 hours of care per week. Caregivers to children must have left the workforce to do so or reduced to part-time hours. The results of this survey may not be representative of all adults meeting the same criteria as those surveyed for this study.

Views expressed are as of the date indicated, based on the information available at that time, and may change based on market or other conditions. Unless otherwise noted, the opinions provided are those of the speaker or author and not necessarily those of Fidelity Investments or its affiliates. Fidelity does not assume any duty to update any of the information.

This information is intended to be educational and is not tailored to the investment needs of any specific investor.

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