What percentage of caregivers pay out of pocket for costs associated with caregiving?

About 75% to 78% of family caregivers pay out of pocket for costs related to caregiving.

According to research from AARP, these caregivers spend an average of $7,242 annually, which amounts to roughly a quarter of their personal income.

📊 Financial Breakdown & Details

• Housing and Household: Around 50% use their own money for general household expenses, 30% cover rent or mortgage payments, and 21% pay for home modifications.
• Medical Costs: Health care, in-home care, medical equipment, and pharmaceuticals make up roughly 17% to 25% of out-of-pocket spending.
• Disproportionate Impact: Financial strain is often heavier for younger caregivers, Hispanic/Latino and African American caregivers, and those supporting loved ones with dementia.

The latest 2026 reports from the AARP Public Policy Institute and the National Alliance for Caregiving show that roughly 59 to 63 million Americans serve as unpaid family caregivers.

Economic and Time Value

• Total Economic Value: Unpaid family caregiving contributes an estimated $1.01 trillion annually to the U.S. economy.
• Total Hours: Caregivers provide roughly 49.5 billion hours of care per year.
• Workforce Equivalent: This unpaid labor equals the work of 23.8 million full-time employees, or about 17% of the entire U.S. full-time workforce.
• Hourly Value: The estimated value of an hour of family caregiving rose to $20.41.

Demographics and Impact

• Average Caregiver Profile: The average family caregiver is 52 years old, and about 61% are female.
• Employment and Finances: Roughly 53% of caregivers maintain outside paid employment, with 53% having missed work or experiencing decreased productivity due to care duties.
• Personal Strain: About 42% to 47% of caregivers report physical health declines or feeling constantly overwhelmed by emotional and physical stress.
• The Sandwich Generation: Nearly 48% of caregivers juggle caring for both older aging adults and children under the age of 18.

Caregivers are underpaid because society historically devalues domestic and care work as "unskilled" women's labor.

A combination of systemic, economic, and historical factors keeps wages low across the care sector:

Historical and Systemic Roots

• Gender and Racial Bias: Over 90% of direct care workers are women, and a large portion are people of color and immigrants. Society has long undervalued labor traditionally performed by women and marginalized groups.
• Exclusion from Labor Laws: The 1938 Fair Labor Standards Act famously excluded domestic workers from minimum wage and overtime protections, setting a precedent of weak legal standards that persists in many care roles today.
• Lack of Bargaining Power: Many home care and domestic workers are excluded from traditional union protections, making it difficult to collectively bargain for higher pay.

Economic and Funding Structures

• Low Government Reimbursement: A massive share of paid care is funded through public programs like Medicaid. Low government reimbursement rates cap the revenue agencies receive, directly limiting how much they can pay workers.
• Intermediary Agency Overhead: Families often pay high hourly rates for senior or home care, but traditional care agencies consume a large portion of those funds (sometimes 40% to 60%) to cover administrative costs, insurance, compliance, and profit margins, leaving workers with poverty-level wages.
• Perceived Skill Level: Despite requiring physical endurance, emotional resilience, and clinical knowledge, caregiving is mistakenly classified as an "entry-level, low-skill" job, which depresses baseline salary offers.

The national median cost for a professional non-medical in-home caregiver is about $34 to $35 per hour.

Cost Breakdowns

• Hourly Rates: Typically range from $25 to $45 per hour depending on your location and the level of care required. Independent private hires often charge less ($15 to $30/hr), while licensed agencies cost more due to background checks and insurance.
• Monthly Costs: Part-time care averages roughly $1,000 to $4,000 a month, while full-time or 24/7 round-the-clock care can escalate from $18,000 to over $24,000 per month.
• State Differences: States like Mississippi offer lower median rates (around $25/hour), whereas states with higher labor costs or rural shortages like South Dakota can reach $44/hour or more.

According to AARP, family caregivers spend an average of $7,242 annually out of their own pockets, which equals roughly 26% of their personal income.

Major Out-of-Pocket Expenses

• Housing and Household Costs: Account for about 50% of total costs, including general household bills, rent or mortgage payments (30%), and home modifications (21%) like ramps or bathroom renovations.
• Medical and Care Costs: Direct medical expenses take up about 17% of spending. This includes health providers, medications, medical equipment, and mobility aids not covered by insurance.
• Daily Living Support: Routine spending on groceries, clothing, and utility bills for the care recipient.

Career and Indirect Costs

• Lost Income and Career Disruption: About half of working caregivers must reduce hours, pass on promotions, or take time off, leading to an average of $10,525 yearly in lost income and work-related financial strain.
• Depleted Savings: Many caregivers must dip into their personal savings or retirement funds to cover daily living and long-term care gaps.