An overlooked $600 billion problem in retirement planning

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A perfect storm in American retirement planning is brewing.

As the population rapidly ages, unpaid family caregivers are already providing 20 to 25 hours per week caring for older loved ones — a hidden burden that MIT AgeLab director Joe Coughlin calls a “$600 billion problem.”

In a recent episode of the Decoding Retirement podcast, Coughlin discussed how caregiving is consuming more time and money than most families anticipate. Highlighting the need, 1 in 4 families spends the equivalent of a part‑time job caring for an older adult, he said, and these hours don’t include caring for children or family members with disabilities.

While emerging technologies — from AI-powered smart homes to household robots — promise to reshape how Americans age, families today face immediate emotional, financial, and logistical pressures.

“Caregiving is … an issue in the shadows that is right now a personal problem but should become a public issue,” Coughlin said.

Retirement planning is often treated as a purely financial exercise, but Coughlin warns that approach may be too narrow. While financial resources are essential, they are only half the equation.

“Financial security is just part of it,” Coughlin said. “You also need to know who you trust to walk into your mother’s home when she’s 80‑something and care for her when you can’t be there.”

When asked who will provide care, most adults assume their spouse or partner will become their primary caregiver, followed by an adult child, usually a daughter, Coughlin said.

But these caregiving arrangements can put emotional, physical, and financial strain on families. Spouses will eventually need their own care. Adult children may live far away or juggle their own careers and families. And hands‑on support, such as adult day programs and home health aides, is often needed for tasks big and small, from administering medication to cooking meals or taking out the trash.

Furthermore, caregiving rarely begins with a single event; it creeps into family life slowly, often long before families feel prepared.

This can have financial ramifications too. Research shows financial decline often begins before a dementia diagnosis due to missed bills, unwise spending, or vulnerability to scams. One 2023 study found that families lost half their wealth in the eight years before a dementia diagnosis.

Coughlin calls this the “leaky pipe” effect.

“Years before the diagnosis of dementia, bad decisions start to happen … and we see that money leak out of that euphemistic pipeline,” Coughlin said. “This is profoundly emotional. When do you have the courage and the opportunity to tell a spouse or a parent, ‘Dad, you’re not quite OK, and I need to step in?'”

Read more: How to protect aging parents from banking scams

Coughlin also highlighted transportation as one of the most overlooked aspects of retirement — something many people take for granted until it becomes an issue.

He noted that 70% of Americans over 50 live in suburban or rural areas where public transit is either nonexistent or too difficult to use. Meanwhile, the top three expenses for couples over 65 remain the same: housing first, transportation second, and healthcare third.

“We also forget that transportation is not just about getting you where you need to be,” Coughlin said. “It is a vital part of quality of life. It’s about getting to the things you want, the things that make you smile.”

Even if you get your needs taken care of — going to the doctor’s office or getting food delivered — what about the small joys? Coughlin illustrated the point with a simple story.

“Will you get an ice cream cone?” he asked. “Will you get the thing on a hot summer night that makes you smile, that you don’t need? You don’t want to bother your adult daughter or a neighbor that you don’t talk to on a regular basis saying, ‘Hey, will you take me out to Dairy Queen for a soft serve?’ That’s not going to happen. But those little things are the things that make quality of life in older adulthood possible.”

“Transportation, frankly, is one of the great missing links to a quality retirement plan — and frankly, in many of our communities,” he added.

So what’s the actionable advice for people who may soon face the reality of giving up driving? Coughlin advised starting with a location assessment and exploring any public transit options you might have ignored.

“If you’ve not used the local subway or bus system — I know it’s difficult to say that if you haven’t used it in 40 years — give it a go,” Coughlin said.

Experiment with home delivery services, from food and groceries to telemedicine, to help bridge transportation gaps. Coughlin also pointed to ridesharing services as a key tool for maintaining mobility.

“As we found during COVID, ridesharing services are now ubiquitous,” he said. “They’re no longer just in the city or near suburbs — they’re out, frankly, where I live, out in the middle of nowhere. If you haven’t tried one of those services, try them, try them often. That way it becomes a transition, and not hitting a wall when driving is no longer either comfortable or capable.”

He emphasized that the ability to drive safely is about health and well-being, not just age. Still, he urged older adults to plan ahead for the day when driving may no longer be comfortable or possible.

Read more: Retirement planning: A step-by-step guide

Coughlin also addressed how evolving technology, smart homes, and even robots are poised to help tackle some of the nation’s toughest caregiving challenges.

Artificial intelligence “is definitely going to be ubiquitous in your retirement,” Coughlin said, explaining that the technology may become “seamless” in the home — similar to the kind of technology Arthur C. Clarke famously described as “indistinguishable from magic.”

In practice, AI may handle small but critical tasks, such as reminding retirees to take medications and monitoring sleep patterns. More importantly, it could give caregivers — both family members and professionals — the ability to intervene before problems become emergencies.

Rather than waiting for a home alert to declare, “Help, he’s fallen, he can’t get up,” AI may be able to serve as an early‑warning system, acting as a “caregiver’s aid” and what Coughlin called “augmented intelligence to age well.”

“It’ll enable your caregiver — formal and family — to be able to intervene, to be proactive before there’s an issue, such as your gait has changed, your walk is a little different, you’re likely to fall,” he said.

Coughlin said robots will likely be part of this ecosystem too. Companies are already envisioning robots capable of folding laundry, cleaning your house, or even performing a social function by talking to you or playing a game with you.

Part of his optimism about embracing technology comes from the reality of the coming “care gap.” With families busier, smaller, or living farther apart, technology will become essential to support aging at home.

“If we want to stay in the homes we love — so‑called aging in place, where our mortgage and our memories are — technology is going to be a helping hand to make that happen,” he said.

However, he added one practical caveat for retirees: This tech support will come with a price tag.

“We should start preparing for that being a new cost in retirement,” he said. “We’ve never thought about it before, but suddenly start thinking of … your cell service, your speakers, your smart devices, and all the subscriptions you signed up for, for your refrigerator to talk to your toaster, to talk to your car, to have the food delivered. That’s an invisible thing on your credit card that now needs a line item in your retirement plan.”

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Got questions about retirement? Email Robert Powell at [email protected], and we’ll do our best to answer it in a future episode of Decoding Retirement.

Each Tuesday, retirement expert and financial educator Robert Powell gives you the tools to plan for your future on Decoding Retirement. You can find more episodes on our video hub or watch on your preferred streaming service.

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