Rising Long-Term Care Demands Strain Retirement Savings

As increasing longevity drives up long-term care needs, and the strain is impacting employee caregivers’ emotional and financial well-being.

In 2025, 63 million U.S. adults, or roughly 18% of the national population, provided ongoing care to adults or children with a medical condition or disability, according to data from the National Alliance for Caregiving and AARP cited in OneAmerica Financials’ “2026 Long-Term Care Market Outlook.”

TIAA estimates that more than 37 million Americans older than age 15 are unpaid caregivers, and many are also full-time workers, says Surya Kolluri, head of the TIAA Institute and co-author of a recent report, “Unready: The State of Preparedness of Current and Future Caregivers.” Kolluri adds that 43% of respondents ages 40 to 64 were already caregivers and 31% expected to enter a caregiver role.

OneAmerica cited an AARP study which estimated that in 2021, unpaid family caregivers collectively provided an estimated 36 billion hours of care, valued at $600 billion. Those caregivers often worked without formal training or sufficient support, according to OneAmerica, and

the emotional, financial and physical toll on caregivers is not only substantial but increasing. Many caregivers reduce work hours, delay retirement or leave the workforce entirely.

Similarly, TIAA found that retirement plan participants frequently withdraw from retirement savings to cover caregiving needs. The report noted that spending from retirement accounts and cause deficits in participants’ accounts that can range from 40% to 90% by the time retirees reach age 65, depending on the length of time required for caregiving. With these shortfalls, TIAA estimates that caregivers would need to work between eight and 24 additional years to make up for lost contributions.

The increasing emotional, financial and structural pressure on family caregivers is particularly relevant to members of Generation X, also referred to as the “sandwich generation,” according to Jeff Levin, a vice president of sales of care solutions at OneAmerica.

At a recent webinar hosted by Levin, Jodi Hirst, licensed clinical social worker for Pike Medical Consultants, said, “The most important place that we [Gen X] can start really is focusing in on our own health … If you’re a caregiver, you are exhausted …  Having space to be able to deal with that is so important. … That first step will help us to be able to say, ‘Let’s regroup, let’s find our foundation, let’s begin to look at a plan.’”

Levin said a long-term–care plan is crucial. “We often talk to producers and financial advisers about making sure [to ask clients:] What is your written plan? Is it written out so people can talk about it? Because you may [only] have your own plan in your head … Having that written plan is very important.”

When planning for long-term care, clients must be sure to have “all the voices at the table,” said Tafa Jefferson, another webinar speaker and founder and CEO of home health care service Amada Senior Care. He said this means advisers, clinicians, physicians and employers need to be involved.

By including advisers, Kolluri says caregivers and future caregivers can better prepare financially for long-term care needs. He says future caregivers can significantly overestimate the availability of paid care and support, or expect their parent to be better prepared.

“The ‘reality versus. expectation’ gap is pretty profound, and we should be educating future caregivers now,” he says. “People need to have not only a retirement plan, but they also need to have a caregiving plan.”