Money & Banking

Intermediate

9 min read 7 stepsMay 8, 2026Verified May 2026

How to Keep Your Own Retirement on Track While Caregiving

Plain-English plan for sandwich-generation caregivers to protect 401(k) contributions, IRA savings, and Social Security earnings while caring for family.

At a Glance

Never Walk Away From an Employer Match

~57s

If your employer offers a 401(k) match, contribute at least enough to get the full match every year you are still working. The match is free money. And it is usually 50 percent or 100 percent of your contribution up to a set percentage of your salary, often 3 to 6 percent. A typical American worker earning $60,000 who walks away from a 3 percent match gives up $1,800 per year, which over twenty years and average market returns is worth more than $80,000. Even during heavy caregiving years, finding the few hundred dollars per month to capture the match is one of the highest-return moves you can make. Talk to your human resources department about your current contribution rate and the match formula. If you are not capturing the full match, set the contribution to the right level today. The change takes effect on the next payroll cycle.

Warning

Some employer matches have a vesting schedule, meaning you only own the match after a few years on the job. Check your plan's vesting rules before changing jobs during caregiving years.

Choose Between Traditional and Roth Accounts Based on Your Tax Year

~55s

Caregiving years are often years of lower income, because of cut hours, leave, or job changes. Lower income usually means a lower tax bracket, which makes the Roth IRA and Roth 401(k) especially valuable. With a Roth account, you pay tax on the money now at your current low rate, and the money grows tax-free for the rest of your life. With a traditional account, you skip tax now at your low rate and pay tax later in retirement, which may be at a higher rate than today. For most caregivers in their fifties and early sixties, the Roth is the smarter choice for new contributions during caregiving years. If your income is too high to contribute directly to a Roth IRA, ask your tax preparer about the backdoor Roth strategy, which is allowed under current IRS rules for any income level. The annual limits and brackets are listed at irs.gov.

Quick Tip

Run your numbers through a free retirement calculator at investor.gov, the official Securities and Exchange Commission tool, before deciding.

Use the Caregiver Tax Breaks the IRS Already Offers

~57s

If you are providing more than half of the financial support for a parent or other qualifying relative, you may be able to claim them as a dependent on your federal tax return, which can reduce your tax bill by hundreds of dollars. The Credit for Other Dependents is currently $500 per qualifying adult dependent, and is listed on Form 1040. If you pay for adult day care or a home health aide so you can work, you may qualify for the Child and Dependent Care Credit, which can return a few thousand dollars to your tax refund each year. Medical expenses paid for a dependent count toward your medical deduction if you itemize. The IRS rules at irs.gov, publication 501, list the income limits and tests in plain language. A free Volunteer Income Tax Help preparer at aarp.org/foundation can walk you through the eligibility and the forms at no cost.

Warning

Claiming a parent as a dependent affects their Medicaid eligibility in some states. Check the rules in your state before filing if your parent is on or applying for Medicaid.

Protect Your Social Security Earnings Record

~1 min

Social Security retirement benefits are calculated from your highest thirty-five years of earnings. Years with no earnings count as zeros and pull down the average. If you take a year off to care for a parent or move from full-time to part-time work, your benefit can be lower for the rest of your life. The fix is not to avoid caregiving leaves, because sometimes they are necessary. The fix is to know the numbers and to plan around them. Sign in to your my Social Security account at ssa.gov and download your earnings statement. Look at your thirty-five highest years. If you already have thirty-five years of strong earnings, a few low-earning years during caregiving will not change your benefit much. If you have many low-earning years still in your record, every year you can keep working at decent pay matters. Some caregivers consider returning to work part-time after the heaviest caregiving phase ends, specifically to replace zero years in their record before they file for Social Security.

Quick Tip

Filing for Social Security at age seventy gives the largest possible monthly benefit, which is often worth waiting for if you can afford to delay.

Plan Around Cut Work Hours Before You Cut Them

~57s

Many caregivers cut their work hours during the heaviest care years. Before you do, look at three numbers. First, the dollar amount you lose per month from the cut, including the lost employer match. Second, the value of any benefits you may lose, like health insurance or disability coverage, if the cut drops you below part-time eligibility. Third, the long-term cost to your Social Security and retirement savings. Some employers offer a leave of absence under the Family and Medical Leave Act, which preserves your job and benefits for up to twelve weeks per year of unpaid leave to care for a parent, spouse, or child. Others offer paid family leave, flexible schedules, or remote work that may let you keep your full salary while providing more care at home. Talk to your human resources department before you cut hours. The choices are wider than most caregivers realize.

Warning

Quitting your job entirely is the most expensive caregiving choice. The lost earnings, lost benefits, lost retirement growth, and lost Social Security credits compound across decades. Try every other option first.

Use a Spousal IRA if You Stop Working

~54s

If you stop working entirely or earn very little because of caregiving duties, you can still keep retirement saving alive through a spousal IRA. Federal rules let a working spouse contribute to an IRA in the name of a non-working spouse, up to the standard annual IRA limits. In 2026, that means up to $7,000 per year for a spouse under fifty, and up to $8,000 per year for a spouse fifty and older. The account is in the non-working spouse's name and grows like any other IRA. This single tool can preserve thousands of dollars of retirement saving per year during a leave from work. Talk to a fee-only financial planner about whether a spousal IRA fits your tax situation, especially if you and your spouse file jointly. The Garrett Planning Network at garrettplanningnetwork.com lists advisors who charge by the hour for this kind of conversation.

Quick Tip

A spousal Roth IRA is often the best choice during a caregiver's reduced-income years, because future tax-free growth is especially valuable.

Rebuild Aggressively When the Heavy Caregiving Years End

~1 min

Caregiving has a beginning, a middle, and an end. When the heaviest phase passes, whether because of a parent's passing, a move into long-term care, or an adult child's launch into independence, the financial pressure can lift quickly. Use that window to rebuild your retirement savings. Maximize your 401(k) contributions, including catch-up amounts if you are fifty or older. Open or refill an IRA. If you have extra cash beyond emergency savings, consider making a one-time lump-sum contribution at the start of the year to capture more growth time in the markets. Talk to a tax preparer about a Roth conversion in a low-income year, which can shift money from a traditional IRA into a Roth at a lower tax rate. The rebuild years can recover much of what was lost during the caregiving years, especially if you start aggressively and keep at it for at least five years before retirement.

Warning

Do not rush back into the workforce at a job that wears you down faster than you can rebuild. A sustainable pace at a slightly lower salary is often a better long-term move than a high-stress job that ends in burnout.

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Family caregivers in the United States lose an average of $304,000 in wages, Social Security benefits, and retirement savings over the course of caring for a parent, according to a 2024 analysis from MetLife. The biggest reason is that caregivers often cut their work hours, drop out of the workforce for stretches of time, or stop contributing to retirement accounts to free up cash for a parent's medical bills or an adult child's rent. Each of those moves has a long financial shadow. A 401(k) contribution skipped in your fifties, when contribution limits are highest, can mean tens of thousands of dollars less in retirement. Years out of the workforce can lower your Social Security benefit for the rest of your life, because the benefit is calculated on your highest thirty-five years of earnings.

The pressure is real. When your father is recovering from a stroke and your daughter cannot pay her rent, the last thing you want to think about is your own 401(k). The math, though, is on your side if you act early and protect a few core habits. A small monthly contribution, even $100, kept up steadily through the caregiving years, compounds into a meaningful balance over fifteen or twenty years. Cutting back is sometimes necessary. Stopping entirely is rarely the right move. The goal of this guide is to give you specific, practical ways to keep saving while caregiving, without pretending that the work or the cost is small.

The rules of retirement saving change at age fifty. Workers fifty and older can contribute extra catch-up amounts to their 401(k) and IRA accounts. In 2026, the standard 401(k) limit is $23,500, and the catch-up for workers fifty and older is an additional $7,500, with even higher catch-ups for workers in their early sixties. For IRAs, the limit is $7,000, with an additional $1,000 catch-up at age fifty. These are not small numbers. A caregiver who keeps contributing the catch-up amount through their fifties and early sixties can finish a hard decade with a much stronger retirement account than one who stopped saving.

This guide covers seven practical moves: keeping employer match contributions, choosing the right account type for your situation, using caregiver tax breaks the IRS offers, protecting your Social Security earnings record, planning around work cutbacks, considering a spousal IRA if you stop working, and rebuilding savings after a heavy caregiving period ends. None of these moves will fix everything. Together, they can mean the difference between retiring at sixty-six and working into your seventies because you fell too far behind.

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