The Caregiver Penalty: What Women Need to Know Before Hitting Pause on Their Career

Taking a career break to care for family is the natural decision for many women — but even a short pause can have lasting financial repercussions. Here's what to consider before stepping away. When you purchase through links on our site, we may earn an affiliate commission. Here’s how it works. Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.You are now subscribedYour newsletter sign-up was successfulWant to add more newsletters?Delivered dailyKiplinger TodayProfit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more delivered daily. 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Stepping away from work to take care of a loved one is a selfless act, but even a temporary pause can bring long-term financial consequences.Whether it's raising children, caring for elderly parents or taking care of a spouse who is sick, that responsibility often falls on women. In 2025, 61% of family caregivers were women, compared to 38% of men, according to AARP.In addition to the increased physical and emotional pressure of caregiving, 19% of women say they've experienced financial strain, compared to 16% of men. That's where long-term planning becomes crucial. Without a plan, recovering from a loss of income and future earning power can be extremely challenging.Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special IssuesProfit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.Profit and prosper with the best of expert advice - straight to your e-mail.Taking time off work not only reduces your income in the short term — it can also impact your ability to earn at the same level in the future, disrupting your career momentum and long-term earning potential. When you stop earning income, even temporarily, retirement savings are usually the first to take a hit.Many employers offer retirement savings programs as part of their benefits package. For example, some companies will allow you to contribute to an employer-sponsored plan, such as a 401(k). Others may offer to match your contributions up to a certain percent. When those contributions stop, the ability for that money to grow over time is also lost. This is where the financial impact can start to buildAbout Adviser IntelThe author of this article is a participant in Kiplinger's Adviser Intel program, a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.Time is one of the most important factors in building retirement savings because of compounding. Basically, this allows your money to grow on itself over time. The longer you remain invested in the account, the more opportunity it has to grow. Pausing contributions, even for a short period, can reduce how much time your money has to grow. Those missed years can be difficult to make up down the line. As a result, what may feel like a short-term decision in the moment can have lasting impacts in the future.Beyond retirement savings, leaving the workforce can impact your Social Security. Benefits are based on your highest earning years. As a result, stepping away can lower your overall earnings record, which can lead to reduced benefits when the time comes to collect. A lapse in savings combined with reduced Social Security benefits can make it more difficult to maintain financial stability in retirement.In one case, I was working with a client who chose to leave her job at the peak of her career to care for an aging parent. After caring for her mother for about a year and a half, the parent passed and she struggled to get back into the workforce. It took her nearly a year to find another position. Even then, she had to work her way back up to the level she'd been at previously. In the end, that decision set her back almost five years financially.I've been confronted with this choice myself. When I started having kids, I had to figure out how to be there for my children while also making sure I was taking care of my future. Instead of leaving the workforce entirely, I became an independent contractor. This allowed me to continue earning income and saving for the future while taking care of my family in the present.Looking for expert tips to grow and preserve your wealth? Sign up for Adviser Intel, our free, twice-weekly newsletter.Situations like these aren't uncommon, but they highlight the importance of planning ahead. No one knows what the future holds, but there are steps women can take to prepare.Caring for another person is one of the most selfless acts you can do, but it doesn't have to come at the expense of your future financial stability. With proper planning, it's possible to take care of both your loved ones and your financial future.This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.Angie Hess Welsh is the founder of My Annuity Agents, where she is committed to helping clients fully understand the annuities they're considering. With an MBA in Finance and more than 15 years of experience, she focuses on transparency and education to prevent costly misunderstandings and buyer's remorse. Angie is also the author of When the Fine Print Isn't So Fine: Your Guide to Avoiding Annuity Buyer's Remorse, a resource designed to help retirees make confident, informed decisions.