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November is National Family Caregiver Month: What Do Caregivers Need to Know About Retiring Early?

BY Spectrum Wealth Management | Nov 2, 2022

November is National Family Caregiver Month, an opportunity to honor the physical, mental, and emotional effort caregivers put into their role every day. When looking after a loved one, it’s important to understand the financial challenges this life milestone can create. 

Whether by choice or necessity, many caregivers may find themselves retiring early. If you’re exiting the workforce, there are a few things to consider to make sure you and your family are supported. 

How to Plan for Becoming a Caregiver

You have a lot on your plate as part of the “sandwich” generation. You may raise children, care for aging parents, and manage your other personal responsibilities. For many people, juggling all of these tasks might include retiring early to become a full-time caregiver. Here are a few things to consider if you find yourself leaving the workforce to care for a loved one. 

1. Understand Your Resources

When faced with the responsibility of becoming a full-time caregiver, you might think that your only option is to leave the workforce. But a few other resources available may be useful in your situation. 

The Family Medical Leave Act allows for “eligible employees of covered employers to take unpaid, job-protected leave for specified family and medical reasons.”1 Check with your company if they offer this coverage. 

You may also be eligible to receive Medicaid, which can allow qualified individuals to manage their own home-care services. Medicaid differs by state, so contact your state’s Medicaid program to see if you or your loved one qualify.2

2. Have an Income Plan

Planning for retirement takes careful strategizing, and becoming a caregiver adds a new wrinkle. By retiring early, you may miss out on ongoing contributions to an employer-sponsored retirement plan. In addition, you may not have access to Social Security, Medicare, or pensions yet. You may also be hit with withdrawal penalties if you want to access your retirement funds early. 

However, even with these additional complications, it’s still possible to prepare ahead for any income gaps. Working with a qualified retirement planning financial professional is key to making this transition smooth. 

3. Consider Your Future

Every caregiving situation is different, and it’s important to consider both your short-term and long-term goals. Do you plan to take on a part-time job if you have the time and capacity? Do you want to re-enter the workforce? Are there other options available so you can still work while your loved one is taken care of? Having a clear sense of what you want for yourself can help you plan for your financial situation in the coming years. 

4. Plan for the Emotional Changes, Too

While it’s important to plan for the financial changes of becoming a caregiver, it’s also important to consider the emotional changes. Being a caregiver can be hugely rewarding but can also take a toll on your mental health. 

Consider ways to maintain your connections to your community while being out of the workforce. This could include joining a support group with other caregivers, picking up a new hobby, or making time to connect with friends and family more often. There are also mental health professionals that specialize in working with caregivers. You don’t need to trade your own mental health for the health of your loved one. A healthy, happy caregiver is a confident caregiver.

You’ve Got This, and We’ve Got You. 

When becoming a caregiver, there’s a lot to consider, especially if you plan to retire early to focus on your new role. Be sure to consider all your available resources to help close any income gaps and account for the financial and emotional changes you’ll likely undergo, from income planning to finding a support system. 

And remember, your financial professional is here to help with life’s big transitions. If there’s anything we can do to support you, please reach out.


Spectrum Wealth Management, LLC is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. Additional information about Spectrum’s investment advisory services is found in Form ADV Part 2, which is available upon request. The information presented is for educational and illustrative purposes only and does not constitute tax, legal, or investment advice. Tax and legal counsel should be engaged before taking any action. The opinions expressed and material provided are for general information and should not be considered a solicitation for purchasing or selling any security.