You've done everything right. You've climbed the corporate ladder, maxed your CPF contributions, diversified your investment portfolio, and meticulously planned for retirement. Your spreadsheets project a comfortable future—perhaps even early retirement if the markets cooperate.
Then the phone rings.
Your parent has been diagnosed with dementia. Or your spouse suffers a stroke. Or your child requires intensive therapy for a disability. Suddenly, all those carefully laid retirement plans encounter an unforeseen variable that threatens to unravel decades of financial discipline: the caregiving tax.
This isn't the sort of tax you'll find in any government policy document. It's far more insidious—a silent wealth destroyer that Singaporeans are increasingly confronting, often without adequate preparation. And for high-earning professionals accustomed to quantifying and managing risk, this represents perhaps the single greatest threat to a comfortable retirement.
Caregiving has become the invisible line item in retirement planning. Whilst Singapore's professionals meticulously stress-test their portfolios against economic downturns, few have calculated the true cost of filial responsibility.
The numbers are sobering. According to a 2025 study commissioned by Dementia Singapore, caring for someone with dementia costs a median of S$24,000 annually even after government subsidies—that's S$2,020 per month shouldering the burden.
"Whenever there is financial burden, it just makes the caregiving so much more difficult," said Jason Foo, Chief Executive Officer of Dementia Singapore.
Before subsidies, these costs soar dramatically. Caregivers face a median monthly expense of S$3,311 in total care costs—combining both direct out-of-pocket expenses and the opportunity cost of time spent caregiving. Government support reduces this by approximately 36%, yet the remaining financial burden remains substantial.
For severe dementia cases, the situation intensifies. Caregivers confront median costs of S$4,081.30 per month before subsidies. Whilst government schemes provide the largest reductions for these most vulnerable families—covering up to 46% of expenses—the remaining costs still demand significant financial resources. Over a decade, families can expect to pay around S$240,000 even with government support, according to research cited by The Straits Times.
But dementia represents only one caregiving scenario. A 2024 Singlife study revealed that the average monthly expenditure on long-term care across all conditions is S$2,952—a 27% increase from 2018 figures.
With Singapore's median monthly income hovering around S$5,500, these caregiving expenses consume more than half of a typical household's earnings. For sandwich generation professionals simultaneously supporting children and ageing parents, the financial strain intensifies dramatically.
Financial planners excel at calculating future values and compound returns. Yet the caregiving tax encompasses costs that rarely appear in retirement calculators:
Lost Income and Career Disruption
The Dementia Singapore study identified reduced or lost income as the single largest expense category, estimated at approximately S$2,000 monthly. Nearly 65% of caregivers experienced employment disruptions since assuming caregiving responsibilities.
The scale of the issue is significant. September 2025 data from the Ministry of Manpower reveals that 87,100 residents are currently outside the labour force due to caregiving responsibilities. Of these, 85.7% are women, highlighting the gendered nature of this financial burden.
The age breakdown is particularly relevant for working professionals:
For the sandwich generation, the financial squeeze is particularly acute. Typically for professionals in their 40s and 50s this couldn't come at a worse time. These should be the decades of maximum wealth accumulation, when salaries peak and children become less financially dependent. Instead, caregivers face an impossible choice: maintain career trajectory or provide necessary family care.
Ms Jacqueline Ang, a 49-year-old technical manager interviewed by CNA, articulates this reality. She manages full-time employment whilst caring for twin daughters with autism, a teenage daughter, and her 75-year-old mother-in-law. "Last year, after my husband's stroke, I was shaking my head and saying, 'Jialat, I'm a caregiver for four special needs [persons]'," she recalled. Her survival strategy? "I told my boss, 'Please don't take away my projects. I can always WFH – work from hospital'."
Time: The Ultimate Non-Renewable Resource
The study found caregivers spend an average of 217 hours monthly—approximately nine days—providing dementia care. This includes 83 hours on supervision to prevent dangerous incidents, 70 hours on daily care tasks, and 63 hours on housekeeping and transport.
For severe cases, this escalates to 292 hours monthly, or more than 12 days. Young-onset dementia requires even more intensive care at 258 hours per month.
Valued against household wages, this unpaid caregiving time translates to a median of S$1,218.75 monthly. This opportunity cost represents genuine economic value—hours that could have generated income, advanced careers, or simply provided rest essential for long-term wellbeing.
Most Common Caregiving Expenses:
"The cost is also significant. So that needs to be considered in the total cost of caregiving," said Dr Philip Yap, chairman of Dementia Singapore.
This time commitment has cascading effects on career progression and CPF accumulation. The reduction in working hours or complete workforce withdrawal directly impacts retirement adequacy, creating a double burden: increased expenses precisely when earning capacity is diminished.
The Burnout Tax
Caregivers in the Dementia Singapore study slept an average of 6.1 hours daily, with those caring for severe dementia patients sleeping slightly less than six hours. Chronic sleep deprivation compounds over months and years, affecting job performance, health, and decision-making capacity—including financial decisions.
The study also revealed that 89% of caregivers believe more could be done to support them, signalling a widespread sense of inadequacy in current support structures despite government subsidies.
You might assume that higher incomes provide a buffer against caregiving costs. Paradoxically, high-earning professionals often face distinctive challenges:
The Subsidy Paradox
Many government grants employ means-testing. The Home Caregiving Grant provides monthly payouts up to S$400 (increasing to S$600 in April 2026), but those owning multiple properties receive only the lower tier of S$250 monthly.
Similarly, various long-term care subsidies scale based on household income and property ownership. Higher-earning professionals may find themselves in an uncomfortable middle ground: earning too much to qualify for substantial subsidies, yet insufficiently wealthy to absorb major care costs without compromising retirement plans.
Delayed Recognition
A 2024 Sun Life study found that 40% of high-income respondents postpone retirement expense planning until five years or less before retirement, whilst 11% never plan at all.
This delayed planning proves particularly problematic when caregiving responsibilities emerge unexpectedly. Professionals accustomed to solving problems through increased effort and income may suddenly discover that time—not money—has become the constraining factor.
Years of progressive income growth often lead to lifestyle expectations that prove difficult to reverse. When caregiving demands reduce working hours or force career changes, the financial adjustment feels more acute. One high-income respondent in research on working caregivers noted: "I often ask how I could stretch my dollar. I am not a business owner, so I am not well-off; neither am I in need where I qualify for higher subsidies. Like many Singaporeans in the middle layer, I find that we are struggling."
Research by AWARE Singapore reveals the long-term retirement adequacy impact of caregiving responsibilities. The 2019 study identified three critical areas where caregiving undermines financial security:
The compounding effect is particularly damaging for high earners.
Consider this scenario: A 45-year-old professional earning S$120,000 annually anticipates working until 65, contributing regularly to CPF and supplementary retirement savings. Retirement models project comfortable financial security.
At 50, a parent develops dementia requiring intensive care. Our professional reduces to part-time work, sacrificing S$40,000 annually in income for the next eight years until the parent's passing. This represents:
This doesn't account for the compounding effect on retirement savings. Money not invested at 50 loses 15+ years of growth before retirement at 65. The true cost could easily exceed S$800,000 in lost retirement wealth.
Meanwhile, Singapore's CPF Full Retirement Sum stands at S$213,000 for 2025, providing modest monthly payouts of S$1,600–S$2,000—barely adequate given rising living costs. The Enhanced Retirement Sum of S$426,000 offers higher payouts but requires substantial savings most Singaporeans struggle to achieve.
Financial prudence demands treating caregiving as a quantifiable risk requiring strategic mitigation—much like disability, critical illness, or market volatility.
1. Early Financial Scenario Planning
Model different caregiving scenarios in your retirement planning:
These exercises reveal vulnerabilities in your financial plan before they become crises.
2. Strategic Insurance Positioning
CareShield Life provides baseline coverage, offering S$662 monthly in 2025 (rising to S$689 in 2026 under enhanced provisions). Supplementary plans can boost this to S$5,000 monthly—potentially covering the median caregiving costs identified in research.
Supplementary disability insurance plans like Singlife CareShield Standard/Plus offer additional benefits including caregiver support payments. Specialised dementia insurance provides targeted coverage for this specific condition.
3. Building Liquid Emergency Reserves
Traditional advice suggests 6-12 months of expenses in emergency funds. Caregiving scenarios may demand 2-3 years of liquid reserves—sufficient to manage immediate costs whilst reassessing long-term plans without forcing suboptimal decisions under duress.
4. Creating Care Networks Before They're Needed
Singaporeans traditionally rely on family for eldercare, yet nuclear family structures and geographic dispersion strain this model. Investigating professional care options, respite services, and community support programmes before they're urgently needed enables more measured decisions.
The Agency for Integrated Care offers various programmes including the Home Caregiving Grant, Caregivers Training Grant, and access to community care services. Familiarising yourself with these resources creates optionality.
5. Honest Family Conversations
Perhaps the most uncomfortable yet essential risk mitigation strategy involves explicit family discussions about future care preferences, financial resources, and responsibility distribution. These conversations prove far more productive before crises than during them.
Singapore confronts a demographic inevitability. By 2026, we'll officially become a "super-aged" society with 21% of citizens aged 65 or older. The caregiving burden will only intensify.
A 2022 National Council of Social Service study found approximately 46.3% of caregivers maintained full-time employment. These aren't edge cases—they're mainstream Singaporeans attempting to balance economic productivity with family care responsibilities.
The economic implications extend beyond individual households. When experienced professionals reduce work hours or exit the workforce entirely due to caregiving, society loses productive capacity, innovation, and mentorship. The "brain drain" of mid-career professionals forced into full-time caregiving represents a significant economic cost rarely quantified in policy discussions.
Dr Millie Su Yun, senior lecturer at the Singapore University of Social Sciences, notes: "Caregiving is going to be a very prevalent trend moving forward. We need to move beyond case-by-case concessions to systemic workplace adaptations."
The choice between care and cash represents perhaps the most fundamental financial dilemma facing modern Singaporeans. Unlike portfolio allocation or property investment decisions, caregiving obligations engage not merely financial calculations but identity, obligation, and cultural values.
This tension forms the core of meaningful discussions we must have as individuals, families, and society. What does financial wellness truly mean when your parent requires constant supervision? How do we balance filial duty with personal financial security? What support structures would enable Singaporeans to meet both obligations without devastating sacrifice?
These conversations demand nuance, empathy, and practical solutions—exactly what The Financial Coconut's Price of Tomorrow: A Financial Wellness Festival aims to facilitate.
On 29-30 November 2025, The Financial Coconut presents The Price of Tomorrow in partnership with RICE Media and OCBC—a financial wellness festival exploring how Singaporeans across generations navigate the tension between economic security and care responsibilities.
The "Care vs Cash: Millennials and the Realities of Caregiving in Singapore" session addresses specifically what this article explores: the lived experience of professionals caught between career demands and caregiving duties, and practical strategies for managing both.
Additionally, the main festival offers panel discussions and workshops exploring financial decision-making across generations, childhood experiences that shape money behaviours, and family dynamics around inheritance and financial planning.
These aren't typical financial seminars promoting products or quick fixes. They're authentic conversations with people navigating identical challenges—sharing what's worked, what hasn't, and what questions remain unanswered.
Because whilst we can calculate compound returns and project retirement income with considerable precision, the messier realities of caregiving demand community wisdom alongside spreadsheet analysis.
Register for specific sessions:
The caregiving tax differs from income tax, GST, or property tax in one crucial respect: you can't avoid it through legal structures or financial engineering. When family members require care, the obligation exists regardless of your portfolio allocation.
Yet like other taxes, the caregiving burden can be managed, optimised, and planned for. The difference between financial devastation and sustainable caregiving often lies not in wealth but in preparation—understanding the likely costs, exploring available support, building appropriate financial buffers, and maintaining career flexibility.
For Singapore's high-earning professionals, this means elevating caregiving from an abstract future concern to a concrete risk factor in retirement planning. It means modelling scenarios that account for reduced income, increased expenses, and opportunity costs. It means investigating insurance options whilst they're still affordable and accessible. It means having uncomfortable conversations with family members about preferences, resources, and responsibilities.
Most importantly, it means recognising that financial wellness extends beyond individual balance sheets. When nearly half of caregivers maintain employment whilst providing intensive care, when 89% believe more support is needed, and when the average cost consumes more than half of median household income, caregiving represents a systemic challenge requiring both personal preparation and societal solutions.
The phone will ring eventually for most of us. The question isn't whether you'll face caregiving responsibilities, but whether you'll face them with adequate preparation or as a complete shock to your financial plan.
Your move.
Disclosure: This article contains factual information about caregiving costs and references The Financial Coconut's upcoming event. All statistics are sourced from credible research and government agencies. This content does not constitute financial advice. Readers should conduct their own research and consult qualified financial advisers for personalised recommendations.
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