Caring for a parent or spouse often means saying yes to fewer hours at work, or leaving a job altogether. It can feel like the only choice in the moment, but the trade-off follows you for decades in the retirement account you're still building.
PLANSPONSOR's review of defined contribution plan data shows how much that trade-off can cost. An employee who spends an entire 35-year career working part-time instead of full-time collects about half the annual retirement benefit of a full-time peer, a gap of roughly $18,000 versus $36,000 a year. Even a shorter break adds up: five years out of the workforce cuts a typical defined contribution benefit by 21%, and ten years out cuts it by 38%.
Decision
Start with where you are right now
Your next steps look different depending on whether the change already happened.
What Cutting Hours Actually Costs in a Retirement Plan
The size of the hit depends on your plan type. In a defined contribution plan like a 401(k) or 403(b), your own contribution and your employer's match both shrink with a smaller paycheck, and less money going in this year also means less growth compounding over the next twenty. In a defined benefit pension, the formula usually looks at your final or highest years of pay, so part-time years dilute that average directly.
None of this shows up as a single bill. It shows up later, as an account that's smaller than it would have been, and the Bureau of Labor Statistics reports that caregiving and family obligations are already why 11% of workers ages 25 to 54 are working part-time.
If unpaid leave is also on the table, federal law protects your job for up to 12 weeks in many situations, and more than a dozen states now pay part of your wage during that time. Read Taking FMLA Leave to Care for a Parent and The Paid Leave Benefit Most Family Caregivers Miss before you assume unpaid leave is the only option.
Keep Your Own Plan From Becoming an Afterthought
Caregiving tends to take over the calendar, and your own retirement contributions can quietly fall off the list of things you check on. Put a specific date on the calendar to revisit your numbers instead of waiting for a year-end statement to surprise you.
This is also where keeping your family in the loop pays off. A short weekly update on what caregiving is costing you, in hours and in dollars, makes it easier for siblings or other family members to share the load instead of assuming everything is fine.
Give family one clear update instead of scattered texts.
Write my updateClose tool
Turn scattered updates into one clear weekly message your family can actually use.
Checklist
Since the change already happened, check these now
A few calls now can recover some of what a smaller paycheck already cost.
0 of 3 done.
Timeline
Protect your own retirement while you're caregiving
Work through this in order, and check off each step as you finish it.
Ask about true-up rules and confirm your current contribution percentage.
Find out whether it covers time away for caregiving and how to apply.
Raise it back up as soon as your income allows, rather than waiting for a full recovery.
Save what you decided here so you can follow through this week.
Rebuild the Contribution When Your Hours Change Again
If your hours go back up later, whether caregiving eases or a sibling steps in, that's the moment to raise your contribution rate back to where it was, or higher, to make up ground.
Check this at least once a year even if nothing else changes. A contribution rate set during a hard caregiving stretch is easy to forget once that stretch ends.
If the financial strain goes beyond your retirement contributions, The Hidden Cost of Caregiving on Your Own Retirement covers the wider picture, including income and savings.
Common questions
How much does cutting back work for caregiving really cost in retirement savings?
PLANSPONSOR's review of defined contribution plan data found that an employee who works part-time for an entire 35-year career collects about half the annual retirement benefit of a full-time peer, a gap of roughly $18,000 versus $36,000 a year. Even a five-year break cuts a typical benefit by 21%, and a ten-year break cuts it by 38%.
Can I get my employer's 401(k) match back after cutting my hours for caregiving?
Ask your plan administrator whether the plan offers a true-up on the employer match at year-end. Some plans true up anyone who contributed less during part of the year, so a mid-year schedule change doesn't cost the full match. This varies by plan, so it's worth a specific call rather than an assumption.
Does paid family leave help if I'm caring for a parent instead of stopping work entirely?
In the states that offer it, yes. Federal FMLA protects your job for up to 12 weeks but doesn't pay you. More than a dozen states now run paid family leave programs that can replace part of your income during that time, which can be a better option than cutting your hours permanently.
