In May 2016, while heading to a comedy show on the New York City subway, 29-year-old Jacquelyn Revere received urgent news from a family friend.

She had to rush back to Los Angeles because something was off with her mother.

Her mother had a simple 15-minute commute with no turns, yet somehow, she got lost for two hours before returning home. Revere instantly took a 21-day leave from her job and flew to California.

Upon her arrival, she discovered her grandmother, who had been diagnosed with dementia in 2014 and lived with her mother, was also neglected. “It was clear she hadn’t had a proper bath in months,” she shared.

What began as a 21-day leave turned into a permanent situation as Revere dedicated the next six years to caring for her mother and grandmother—both suffering from dementia. Initially, this was unpaid work, but eventually, she received minimum wage for a limited number of hours each month through a California state home care program. Her grandmother passed away on November 6, 2017, and Revere continued caring for her mother until she died in March 2022.

Now, at 37, Revere still resides in the house where she cared for her family, but she has nearly no retirement savings. She generates income by renting rooms to interns from a nearby engineering firm and through paid social media content that highlights the struggles of “invisible” caregivers. She covers her health insurance through state assistance.

Revere’s experience isn’t unique. A study from the Columbia University Mailman School of Public Health, funded by Otsuka Pharmaceuticals, highlights that the financial burden of caregiving isn’t only affecting older adults, but also younger caregivers.

By diverting funds to caregiving costs and missing out on crucial retirement contributions, younger caregivers risk seeing their retirement savings drop by an average of 40% to 90% by age 65, depending on their salary, in comparison to non-caregivers. This loss is equivalent to needing an extra seven to 21 years of work to make up for the savings deficit.

How does caregiving lead to retirement challenges?

Many Americans struggle to save for retirement, but taking on caregiving roles makes it even harder, negatively impacting their capability to build generational wealth and manage debts, the study revealed.

“Caregivers spend about $7,200 annually,” explained John McHugh, the lead researcher of the study. “Part of this expense comes from missed retirement savings or not being able to take advantage of their employer’s 401(k) match. Additionally, debt such as credit cards compounds over time, with caregivers finding themselves accumulating debt instead of savings.”

The financial strain is particularly acute for low-income caregivers. For instance, if caregiving starts at age 35, a person making $50,000 can face a staggering 107.8% deficit in retirement savings by age 65, compared to a 60.4% gap for those earning $75,000, and a 46.9% deficit for individuals making $100,000.

McHugh mentioned that the study only takes into consideration the missed contributions and their growth from shifted funds. If other aspects like leaving the workforce, missing promotions, or taking prolonged leaves were factored in, the financial losses would likely be more substantial.

How savings dwindle

When she arrived in California, Revere faced significant challenges beyond just health concerns.

“We received letters warning us about foreclosure due to missed mortgage payments,” Revere recounted. “My mother couldn’t understand what was happening, leaving me in the dark while others were trying to exploit our situation.” Additionally, their life insurance policies lapsed because of unpaid bills.

Revere was able to gain power of attorney over her mother’s finances since they shared a bank account, allowing her to use that money for overdue mortgage payments. She also depended on her grandmother’s $5,000 monthly pension and Social Security benefits to cover the family’s bills and living costs.

However, she acknowledges that the years of caring for her relatives without adequate compensation have severely impacted her personal finances.

Who can provide support?

If elected as president, Vice President Kamala Harris has proposed expanding Medicare to include home care for seniors and people with disabilities, while former President Donald Trump has suggested implementing a tax credit for family caregivers. Both proposals would need approval from Congress.

“It’s encouraging to see caregiving being discussed on a national platform,” expressed Liz O’Donnell, the founder of Working Daughter, a support network for women caregivers. O’Donnell faced her own challenges caring for both of her terminally ill parents while managing her own family and job.

She was fortunate to have negotiated a flexible work arrangement with her employer, but noted that not everyone has that option. “We need private sector involvement,” she added. “Employers can be crucial in driving change and often implement solutions more swiftly.”

As companies adapt their employee benefits to be more flexible, McHugh suggested that caregiving leave could be included as an option for benefits. “Not everyone needs childcare leave; many may need time off for caregiving,” he remarked.

Invest in Yourself

Experts emphasize that waiting for governments and companies to provide solutions can take considerable time, especially with over 10,000 Baby Boomers reaching the age of 65 each day.

“Individuals must assume more responsibility for their long-term care,” states Patrick Simasko, an elder law attorney and financial advisor at Simasko Law in Mount Clemens, Michigan. “People are living longer, and Social Security benefits are often insufficient. Living longer doesn’t guarantee better health, so planning is essential.”

Consider the following:

Long-term care insurance helps cover routine services such as assistance with bathing, dressing, or getting in and out of bed, whether at home or in facilities like nursing homes or assisted living centers. These services typically aren’t included in standard health insurance, yet many seniors may require this support.

However, these insurance plans can be expensive, and people usually need to purchase them while they are still healthy. Simasko mentions, “On average, a third of individuals will spend about 32 months in a nursing home.”

A life insurance policy with a long-term care rider allows individuals to use part of their death benefit during their lifetime for long-term care expenses. However, this means that the amount used for care will reduce the inheritance for beneficiaries.

Focusing on your long-term care planning. “Young couples often prioritize their 401(k)s and receive advice on saving for things like orthodontics and college tuition,” O’Donnell noted. “Why isn’t it emphasized to save for my own extended life?”

Experts suggest that it is acceptable for parents to allow their children to manage their own education or wedding costs so that they can secure their long-term care. This can ultimately be a significant gift to their kids, as “It’s our duty to prepare so our children won’t feel overly stressed,” O’Donnell added.

Designating trusted contacts and establishing a power of attorney can help prevent financial scams targeted at the elderly, according to Simasko. Adding a “trusted contact” to financial accounts allows institutions to notify them about potential fraud. A power of attorney ensures that if a loved one becomes incapacitated, someone can access critical information and make necessary decisions on their behalf.