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The Critical Role of Women in Family Caregiving

Family caregiving is a critical responsibility that often falls on women, particularly those in midlife and beyond. The United States’ reliance on family caregivers will only increase.

Reviewed by
Kate Grayson

Family caregiving is a critical responsibility that often falls on women, particularly those in midlife and beyond. The United States’ reliance on family caregivers will only increase as the population continues to age, with the number of people requiring long-term care expected to double in the next decade.

While caregiving can be emotionally rewarding, it can also have significant financial implications, particularly for women, who are already at a well-documented systemic financial disadvantage. The financial impacts of family caregiving on women are substantial and long-lasting.

Unpaid caregiving is valued at $600 billion per year – or $16.59 per hour on an individual level. An estimated 65% of the nation’s family caregivers are women, with women of color carrying a disproportionate responsibility. Caregiver compensation quickly becomes an important part of any discussion on gender pay parity, given the large gender imbalance in family caregivers.

Women and Caregiving

While family caregiving is often a labor of love, it is incredibly taxing, with family caregivers taking on many roles from nurse to chef to administrative assistant. Not only are 65% of caregivers are women, but female caregivers are also shown to spend as much as 50% more time providing care than male caregivers do. Understandably, this level of caregiving can – and does – have a detrimental effect on a woman’s physical, emotional, and financial health. Caregivers are at increased risk of developing chronic health conditions, and studies have shown that female caregivers are twice as likely to forgo their own healthcare needs when compared to non-caregiving women. Caregiving is often also very emotionally draining and isolating, with caregivers reporting higher levels of anxiety and depression. However, the financial impacts of family caregiving are perhaps the most extreme outcome.

Financial Impacts of Caregiving on Women

The financial impacts of family caregiving on women are immense and far-reaching, with female caregivers being two and a half times more likely than non-caregivers to experience poverty later in life. Women put themselves at tremendous financial risk to provide care to their loved ones, and it is imperative that this labor receive appropriate compensation. 

Personal spending on caregiving

A Merrill Lynch study reports that 68% of family caregivers are “financial contributors,” spending an estimated $190 billion a year in total on their care recipients for out-of-pocket, care-related expenses. These costs can vary in nature, from transportation to medical supplies, and are especially impactful when the caregiving role is long-term. 

AARP found that family caregivers, on average, spend 26% of their income on caregiving-related costs, or $7,242 annually. However, this is even higher for women of color, with Hispanic female caregivers spending an average of 47% of their income on caregiving costs. 

Decreased lifetime wages

Female caregivers will often have to reduce their working hours or leave the paid workforce entirely, which can result in substantial lost income and reduced earning potential. When a woman leaves the workforce for even just three years it costs her an average of $598,096 in earnings and retirement savings.

Retirement insecurity

In addition to shorter-term income loss, leaving the workforce impacts women’s retirement savings and long-term financial stability. Women who leave the workforce to care for family members may miss out on important retirement contributions and benefits, potentially leading to lower retirement distributions, pension incomes, and reduced Social Security benefits. If a woman had financial stability before caregiving, she is not immune to the risks, with the 2018 Northwestern Mutual CARE Survey finding that 63% of people have withdrawn money from their savings or sold assets to provide care to their loved ones. 

Aidaly is Here for You

As a society, it is time we recognize the importance of caregiving and provide better support – and monetary compensation – to people who take on this vital responsibility. Caregivers deserve to be compensated for their labor, and creating financial systems that compensate caregiving work is vital financial equality efforts.

At Aidaly, we know that family caregiving is real work. Through Aidaly, family caregivers can get qualified for available programs, understand and track their tax credits and deductions, and get paid for their caregiving labor. But it doesn’t stop with getting you paid. We are committed to improving the financial outcomes for family caregivers, and offer our community personal finance programming – through workshops and one-on-one coaching – so that family caregivers can achieve lifelong financial stability. We are looking forward to meeting you!

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