Family caregivers now spend $11,508 a year on out-of-pocket costs

The average American family caregiver now spends $11,508 out of pocket each year to support a relative with a disability, chronic illness, or aging needs. A study released Wednesday by AARP indicates this figure represents a 60% increase over the last five years. For most caregivers, that expense consumes roughly 31% of their annual income.

This rate of cost growth far exceeds general inflation. The federal Bureau of Labor Statistics measured overall inflation at 24% during the same period. The jump in caregiving costs is more than double that rate, driven primarily by the price of food, housing, and medical services. The survey included responses from 2,538 family caregivers.

Megan O'Reilly, vice president of governmental affairs at AARP, attributes the rise to the complexity of care provided at home. As medical responsibilities shift from facilities to households, the financial burden increases accordingly. O'Reilly noted that the volume of care required directly correlates with the cost.

The financial strain is compounded by lost wages. The AARP report finds that many caregivers must cut back on working hours or leave the workforce entirely to meet care demands. This creates a dual financial hit: rising expenses alongside a reduction in household income. Approximately half of surveyed caregivers reported making major financial sacrifices, such as working extra hours, dipping into savings, or using retirement funds.

Meghan Maher experienced this pressure firsthand. Seven weeks after giving birth, her mother was diagnosed with advanced cancer. Maher, who worked in cancer research, reduced her schedule to part-time and eventually quit. Her family's income dropped by half. When her father later required hospitalization and home support, Maher estimated the additional cost of childcare at $10,000 annually. She now works as a self-employed death doula to maintain the flexibility needed to manage her father's aging.

The scale of this labor is vast. About 63 million adults in the United States currently provide ongoing help to a family member or friend, representing roughly one in four adults. The AARP projects that 70% of people turning 65 today will require some form of assistance as they age. Medicare does not cover routine in-home help, making private funding or long-term care insurance necessary for many families.

Market rates for professional care remain high. According to Genworth's 2025 survey, 40 hours of in-home assistance per week costs approximately $72,792 a year. A shared room in a skilled nursing facility averages $115,000 annually. For Maher, navigating these costs in Florida involves hiring an attorney to qualify for Medicaid, a process she estimates costs $6,000 despite the state's coverage of long-term care.

Public support systems vary by location. All states provide some payment to family caregivers through Medicaid programs. In California, more than 800,000 caregivers earn between $16.90 and $25 per hour for in-home work. However, funding for these programs faces pressure from a federal budget bill that reduces Medicaid spending by nearly $1 trillion over the next decade. Veterans Administration benefits offer another pathway to financial aid, though application rules are complex enough that many caregivers hire advocates.

Legislative proposals aim to ease the burden. Six states currently offer tax credits to family caregivers for expenses such as home modifications, ranging from $1,000 to $5,000 annually. Two other states have limited programs. A bipartisan bill introduced in Congress last year would establish a $5,000 tax credit nationwide. In 14 states and the District of Columbia, employers must offer paid family and medical leave, a provision another federal bill seeks to make national. A third proposal would protect Social Security benefits for full-time caregivers who stop working.

Nancy LeaMond, AARP executive vice president, said the visibility of caregiving costs is increasing. She stated that the number of people paying these amounts will drive action in the legislative arena. Maher testified before a Senate committee on aging in April, describing the financial tradeoffs of self-employment. She was invited to speak by Daughterhood, an organization that provides resources for caregivers.