Caregiving Costs Hit $11,500 A Year: What The 2026 AARP Report Means For Black Families

Caregiving costs have climbed faster than gas, rent, or groceries—and for Black families, that financial squeeze has reached crisis levels. While family caregivers nationwide spend an average of $11,508 a year out of their own pockets caring for a loved one, Black caregivers shoulder an average of $13,565 annually. That bill consumes a staggering 52% of household income, compared to 24% for white caregivers.

According to a 2026 AARP survey of 2,538 family caregivers, nearly 9 in 10 now pay for care directly out of pocket. Nationwide, average spending has jumped 59% since 2021—rising from $7,242 to $11,508 (about $959 a month). Even adjusted for inflation, which puts the 2021 figure around $9,100, caregiving expenses have vastly outpaced everyday consumer prices.

This financial weight lands on an expanding demographic, according to a 2025 AARP and National Alliance for Caregiving report. 63 million Americans—nearly 1 in 4 adults—now provide ongoing, unpaid care to an adult family member or friend, up 20 million from 2015. Here is what the 2026 data reveals about where the money is going, why the safety net is failing families and how caregivers can start reclaiming critical benefits.

Why lower-income families carry the heaviest burden

On average, caregivers put 31% of their household income toward care, AARP found. However, for households earning less than $40,000 a year, that share jumps to 76%.

Notably, lower-income caregivers don’t spend much less. They spent $11,448 on average, nearly the same as everyone else. The difference is how much of their paycheck that money represents.

The gap is also stark by race. Black caregivers spent an average of $13,565 this year, or 52% of their income. White caregivers spent $9,806, or 24% of theirs.

Missed benefits can widen that gap. Pedro M. Silva, a principal partner at Apex Investment Group, a registered investment advisor, sees families leave money on the table. “We have found situations where the person receiving the care is eligible for benefits through Long-Term Care insurance or work-related benefits, but they had not yet been activated by the family,” he told Blavity Health.

Where are caregivers actually spending their money?

Most caregiving costs aren’t medical, though. Instead, the biggest share, 42%, goes to housing and household expenses, AARP found. That averages $4,797 a year.

Within that category, food and nutrition make up 27%, while rent, mortgage and property taxes make up 25%. In other words, many caregivers are helping keep a parent housed and fed.

Medical costs come next, at 29% of spending, or about $3,313 a year. That includes copays, insurance premiums, prescriptions and equipment. Together, household and medical expenses make up 71% of what caregivers spend out of pocket.

Many families also assume Medicare will cover more than it does. Max Mayblum, founder and CEO of Givers, a company that helps family caregivers get paid through state programs, said that’s a costly mistake. “Medicare covers short-term skilled care, not the custodial help (supervision, bathing, dressing, meals) that dementia requires every day,” he told Blavity Health. “That gap is why costs land on the family.”

Medicare.gov confirms it: “Medicare doesn’t pay for long-term care,” including care in a nursing home or at home, unless medical care is needed.

The dementia factor: How memory care pushes expenses even higher

Dementia drives caregiving costs even higher. Caring for someone with Alzheimer’s or another dementia costs about $5,600 more a year than caring for someone without dementia, according to AARP.

The care itself is part of the reason. People with dementia often need supervision around the clock, even if they can still walk and dress themselves. Similarly, AARP found that high-intensity caregivers spend nearly $7,000 more a year than lower-intensity caregivers. And those who handle three or more medical or nursing tasks spend nearly $8,000 more.

Medicaid can help some families. “Most states run Medicaid home and community-based waiver programs that fund in-home care, and some allow the family caregiver to be the paid caregiver,” Mayblum said. “Many families spend years unpaid because nobody told them.”

He suggests calling your local Area Agency on Aging first. Specifically, ask whether your state’s Medicaid waiver covers in-home care and whether it allows paying a family member. Because eligibility and waitlists vary by state, he said families “should apply early.”

Dipping into the 401(k): The hidden toll on caregivers’ retirement and careers

When caregiving costs drain their savings, many caregivers turn to their own retirement accounts. Caregivers who draw on retirement savings spend an average of 49% of their household income on care, AARP found. Those who borrow money spend 50%.

That choice can cost more than it seems. Withdrawals from a 401(k) or IRA before age 59 1/2 usually carry a 10% additional tax on top of regular income tax, according to the IRS.

Careers take a hit, too. Nearly two-thirds of working caregivers made at least one change at work, such as taking time off or changing their hours. Moreover, 67% of caregivers who resigned early now face heavy financial challenges, as do 56% of those who retired earlier than planned.

Silva urges families to move quickly on any benefits they qualify for, since many have waiting periods. “If someone needs regular care and funds to provide that care, we suggest looking at and applying for all available sources of benefits quickly,” he said.

How caregiving costs affect caregivers’ health

Money stress also affects caregivers’ own health. Bonnie King, PhD, LPC-S, founder of the Counseling & Nature Therapy Center in Frisco, Texas, sees it often. “When costs climb, many caregivers cut back their work hours, dip into savings or put off their own doctor visits, and the worry follows them everywhere,” she told Blavity Health. “I see it show up as anxiety, poor sleep, irritability, headaches and depression.”

Guilt adds to the strain. Caregivers “may feel guilty for resenting the costs, for thinking about memory care, or for taking an afternoon for themselves,” King said. Still, she added, “Keeping their own medical appointments is part of being able to keep caring for someone else.” That matters even more if you’re managing your own health, such as type 2 diabetes.

Why the push for caregiver tax credits matters now

AARP is urging Congress to pass the bipartisan Lowering Costs for Caregivers Act. The bill would allow caregivers to use funds from their health savings account or flexible spending account to pay medical costs for a parent or spouse, even if that person isn’t their tax dependent, according to Ascensus.

Separately, the bipartisan Credit for Caring Act would create a tax credit of up to $5,000 for family caregivers who pay for care. To qualify, the person receiving care would need a health care practitioner to certify long-term care needs, according to Sen. Susan Collins’ office.

Neither bill has become law yet. Even so, with caregiving costs rising and 63 million Americans providing unpaid care, AARP says relief can’t wait.

Bottom line

Caregiving costs have jumped 59% in five years, and lower-income and Black families are giving up the biggest share of their income to care for loved ones. Before you tap retirement savings or leave work, check Medicaid waivers, existing benefits and local aging services.

Frequently Asked Questions

What is the average out-of-pocket cost for a family caregiver in 2026?

Family caregivers spend an average of $11,508 a year out of pocket in 2026, up 59% from $7,242 in 2021, according to AARP.

How does caregiving impact a family’s overall household budget?

On average, caregivers spend 31% of their household income on care, and that share rises to 76% for households earning under $40,000, according to AARP.

Citations

AARP. New report reveals crisis point for America’s 63 million family caregivers. Published July 24, 2025. https://www.aarp.org/press/releases/2025-07-24-new-report-reveals-crisis-point-for-americas-63-million-family-caregivers.html

Ascensus. Proposal would expand medical expense coverage for caregivers. https://www.ascensus.com/industry-regulatory-news/news-articles/proposal-would-expand-medical-expense-coverage-for-caregivers

Collins S. Collins, bipartisan group introduce bill to provide financial relief to caregivers. U.S. Senate. Published February 7, 2024. https://www.collins.senate.gov/newsroom/collins-bipartisan-group-introduce-bill-to-provide-financial-relief-to-caregivers

Internal Revenue Service. Topic no. 558, Additional tax on early distributions from retirement plans other than IRAs. https://www.irs.gov/taxtopics/tc558

U.S. Administration for Community Living. Eldercare Locator. https://eldercare.acl.gov/

U.S. Centers for Medicare & Medicaid Services. Long-term care. Medicare.gov. https://www.medicare.gov/coverage/long-term-care

Wynn P. New AARP report: Caregiver out-of-pocket spending rises 59 percent. AARP. Published October 28, 2026. https://www.aarp.org/caregiving/financial-legal/caregiving-out-of-pocket-cost-study/