For the past decade, Brian and Rose Armstrong have been full-time caregivers for their grandson, now 11.

The financial toll on their retirement savings is a grim reality for the 66-year-old Mount Laurel, N.J., residents, who retired two years ago.

Folks like the Armstrongs, who are caregiving for an aging parent, spouse, or other family member, face greater financial strain, lower retirement confidence, and more worry about the future — and millions of people are in that boat. 

A staggering 63 million Americans — nearly 1 in 4 adults — provide unpaid care to an adult with health or functional needs or to a child with a serious medical condition or disability, according to AARP. That’s up from 53 million in 2020.

People often have little choice, but there are financial repercussions for retirement — especially one that can span three decades or more.

“Caregiving is often discussed as a family, health, or workplace issue, but this research shows it is also an important retirement security issue,” said Craig Copeland, director of wealth benefits research at Employee Benefit Research Institute (EBRI), which published new findings.

“The big issue is that if you’re not yet retired, caregiving can take time away from work, which then can prevent you from building up your savings,” he said. “And you’re also more likely to retire earlier than you expect — even if your retirement savings were on track to that point, that’s going to really put you at a disadvantage when it comes to your retirement finances.”

Expectations vs. reality of retirement

A large percentage of retirees, regardless of whether they are caregivers, leave the workforce earlier than planned. The three biggest reasons are their own health, a job loss, or caregiving for a family member. 

Caregivers are more likely to retire earlier than planned because of their responsibilities, while non-caregivers often quit because they were offered an early retirement package from their employer, per the data.

Meanwhile, more than 6 in 10 caregivers are female, according to the research.

“Women face many hurdles that threaten their retirement security — they live longer than their male counterparts, and they need more income to cover those years,” Cindy Hounsell, founder and president of the Women’s Institute for a Secure Retirement, told Yahoo Finance. “The impact of caregiving responsibilities on top of that causes them to save less, which means recovering financially is unlikely for many of them in this situation.”

Read more: Long-term care insurance — what it is and how to plan

A third of caregivers reported less than $10,000 in savings and investments. They are also more likely than non-caregivers to struggle with debt, mental health strain, and lower confidence about their long-term financial future, according to the EBRI data. 

“That combination can make it much harder to build and preserve retirement security,” Copeland said.

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‘No financial preparation for caregiving’

Debt is another problem. It’s hard to pay it off if you have to stop working, and becoming a caregiver often means taking on new debt.

“There’s no financial preparation for becoming a caregiver,” Hounsell said. “It’s a shock. You can have sick parents, for instance, and not think that it’s going to have anything to do with you, but you find yourself either having to step back from work, or not being able to contribute to your retirement savings because you’re giving money to them or paying for some of their stuff.”

Many working caregivers, as the Armstrongs were for eight years, juggle duties. More than 60% of caregivers are balancing their caregiving responsibilities while still employed, AARP found. And half report they reduced hours, took unpaid leave, or quit their job entirely. 

The overall picture is harsh, and it’s not going away, Copeland said. 

“Many of the caregiving retirees told us that their lifestyle in retirement is not what they envisioned and more likely to say that various expenses are higher in retirement than what they expected,” Copeland said.

The Armstrongs are well aware of the realities of a revised retirement life. The couple dreamed of using their savings to travel or buy a dream house at the shore, which may never materialize.

“We’re our grandson’s primary provider of food, clothing, medical care, and shelter,” Brian said. “Although we get some gifts from relatives, this is a substantial amount of money we provide each month.” 

Fortunately, most of his doctor’s expenses are covered through Rose’s supplemental insurance as a former teacher. 

The couple is on track to fund their golden years, for now, thanks to monthly income from Social Security, along with Rose’s New Jersey state employee pension and other savings — “which we hope will sustain us,” Brian said.

Kerry Hannon is a Senior Columnist at Yahoo Finance. She is a career and retirement strategist and the author of 14 books, including “Retirement Bites: A Gen X Guide to Securing Your Financial Future,” “In Control at 50+: How to Succeed in the New World of Work,” and “Never Too Old to Get Rich.” Follow her on Bluesky.

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