Caregivers are now spending more than $11,000 a year out of pocket-up 60% in five years

By Beth Pinsker

AARP study shows the financial sacrifices families make-and their long-term impacts

You may feel like you're just helping out a little, but before long, the average caregiver spends more than $11,000 a year.

Financial caregiving often starts slow. Mom has a big doctor's appointment, so you fly in. Everyone is so exhausted after that you spring for takeout. Maybe you notice groceries are low, so you make a delivery order. Before you know it, you're deep in it.

How deep? The new average out-of-pocket cost is a staggering $11,508, according to a major study from AARP.

"When you're in the act of caregiving, you're thinking about the actual tasks. You're not thinking about what you are pulling out of your pocket," said Rita Choula, senior director of caregiving at the AARP Public Policy Institute. "If I'm taking my mom to the doctor, I'm not thinking about the gas or the copay I pick up."

The small things add up. The average caregiver gives over 31% of their budget to caregiving costs, putting them at financial risk. The AARP survey found that 75% of caregivers had taken an adverse financial action to cover costs. Nearly 50% dipped into retirement savings and 38% limited their retirement savings. Half took a private loan and more than a third cut personal spending or dipped into their personal savings.

These are not exaggerated or unscientific guesses, but rather the result of years of caregiver research by AARP. The organization updates its out-of-pocket cost averages every five years. The last was in 2021, when the average spend was $7,242. The dollar figures come from AARP asking survey respondents to document actual spending on caregiving for a week.

The study attributed the massive increase to rising healthcare costs and increased caregiver responsibilities, along with easier access to digital solutions that allow family and friends to arrange care from afar, like paying bills and ordering online.

Choula said it was eye-opening for the participants. "The individuals providing care just don't think about it. They don't realize when they aren't able to save any more, or their bank account is lower. When they really took the time and were really intentional about it, they could see how rapidly these dollars add up."

What financial caregivers do

Many people who write a check here or there or help with tax returns don't consider themselves caregivers, which they said meant handling hands-on medical tasks. But AARP found a wide range in the tasks that people do as financial caregivers and what they pay for.

Most of the money goes toward household needs: groceries, bills and housing costs. A third went toward medical expenses like copays and equipment, and 11% went toward personal costs for the caregiver, such as travel and babysitters to cover child care.

The type of illness involved and the living situation drove differences in caregiving costs. For spouse caregivers living with the care recipients, costs were much lower than for an adult child caring for an aging parent but not living with them. African-American and Asian caregivers faced much higher costs than white ones. Care for an ill person under 40 was particularly high - $4,700 more per year than the out-of-pocket average.

A recent study on financial caregiving by financial firm Edward Jones broke down tasks of a financial caregiver in more detail, tallying it at an average of 109 hours per month. Almost three-fourths assisted the care recipient in paying bills, and nearly 70% helped them manage their bank accounts. More than half also managed health services, protected them from fraud and handled investing. Only 29% offered support managing real estate.

"Caregiving deserves as much attention as the other areas of our personal lives that we plan for," said Meilii Gensler, a managing director at Edward Jones. "The biggest thing to do is start the conversation before care is needed. Don't put yourself or anyone else you love in a more difficult position."

Long-term effects

Planning helps. When a family is in emergency mode, they may not see the risk to their finances in some of these actions, particularly the dip in retirement contributions or the impact of early withdrawals.

"The numbers are staggering and the long-term implications are great," said Angela Antonelli, a research professor and the executive director of the Center for Retirement Initiatives at Georgetown University's McCourt School of Public Policy. "The younger caregiver population is stepping into roles that could last 10 to 15 years, and the damage is unrecoverable. It's mind-blowing."

The Edward Jones study calculated the average caregiving spend at $8,737, but it was focused on caregiving for older adults, while the AARP study included caregiving for disabled younger people. The study also found that when the care recipient didn't have enough funds of their own, the average caregiver net contribution rose to $12,863 a year. When the care recipient had been the subject of financial fraud, the caregiver net contributions averaged $10,583 a year. Some 70% reported making a financial sacrifice to provide care.

Nearly 20% of the more than 3,000 caregivers surveyed stopped work entirely to focus on caregiving, while 24% took unpaid leave and 22% passed up a promotion or other career opportunity. Some 7% had to declare bankruptcy.

Edward Jones

"What struck me the most is the breadth of it - there are 33 million people providing financial caregiving in the U.S. That's not a niche population," said Gensler. "They are spending about 3.5 hours a day doing this. That's a part-time job; that's a huge time commitment."

Both AARP and Edward Jones offered possible solutions to the financial impact on caregivers, mostly involving more financial support for the care recipient and more resources and training for the caregivers.

AARP outlined a five-point plan for change in its report that starts with the government allowing caregivers to use their own pretax health accounts (FSAs or HSAs) for caregiving costs, including increased tax credits for caregivers and compensation for care work.

A key part of this is expanding training for caregivers, both on the medical side and financial side. "Many people think Medicare pays for long-term care," said Choula, "So right from the start there's some financial literacy that needs to occur."

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-Beth Pinsker

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10-31-26 1411ET