The Cost of Caregiving: How a Career Break Can Affect Your Financial Planning

Key Takeaways

• Financial planning for women with caregiving responsibilities needs to account for paused EPF contributions, lapsed insurance, and income gaps that build up over time.
• Malaysian women spend 25.5% of their day on unpaid care work, compared with roughly 17% for women in OECD countries, based on DOSM’s July 2026 survey.
• 63% of women outside the workforce cited housework and caregiving as their main reason for not working, per UNDP Malaysia’s March 2026 analysis.
• Career breaks stop both the employee’s and employer’s EPF contributions on day one, and the financial loss compounds well beyond the break itself.
• The decisions that protect your finances during a care period (insurance, EPF continuity, savings buffer) are far easier to make before the break than after.
• Financial literacy for women in caregiving situations starts with understanding what the system does not provide, not just what it does.

Introduction

When a woman steps back from work to care for a newborn baby or an ailing family member, the financial side of that decision often gets overlooked. The effects that a career break has on your finances may not be apparent in the beginning, but they will start growing and become more prominent down the road. 

First off, you will lose your most stable income source – your salary. Then, employment-linked monthly EPF contributions stop. Other benefits received from your employment, such as medical insurance and travel allowances, may also end under the terms of the company’s scheme.

If this sounds familiar, you are certainly not alone. A United Nations Development Program (UNDP) Malaysia analysis from March 2026 found that 63% of women outside the labour force cited housework and caregiving as their main reasons for not working. What is often missing is a plan for the financial cost. Many women only begin to feel the pressure once expenses pile up and their savings start shrinking.

If you are considering a career break for caregiving, good financial planning is about looking beyond this month’s bills. It means knowing what may stop, what may cost more and how you will handle the expenses you cannot predict yet.

What Does Caregiving Actually Cost?

The most obvious cost is your salary. For many salaried career women, that is the household’s most dependable monthly income. What is easier to miss is everything else that stops with it.

A career break does not affect only the months or years you are away from work. Your EPF contributions, including your 11% employee contribution and your employer’s share, stop after your last day of employment. That missing money also loses valuable time to grow through compounding. A longer break may therefore affect the amount available at retirement, even when a person later returns to employment with a higher salary.

And there is another cost that is easy to miss. An EMIR Research study noted that women who return to work after taking a career break end up earning less than they did before. A one-year career break can lead to significant wage losses of around 4%. That lower salary may also mean lower mandatory EPF contributions after returning to work.

You may also miss opportunities for promotions and salary increases while you are away. Stepping out of the workforce can interrupt career progression, which may also mean missing bonuses, increments, commissions or allowances.

You will not see many of these costs neatly listed on a payslip, which is why they are so easy to overlook. Their effects can build gradually and may only become clear when you review the longer-term impact on your finances.

3 Financial Gaps Women Face During Caregiving Breaks

Safety Net Weakens: your asset growth slows down, but time keeps moving

Once the break begins, your ability to save and invest, your EPF contributions, and mandatory contributions from employment stop. This means your assets have less opportunities to grow. EPF’s Retirement Income Adequacy Framework, which came into effect in January 2026, puts the Adequate Savings target at RM650,000 by age 60. Belanjawanku 2024/2025 estimates that a single retiree in the Klang Valley needs around RM2,690 a month for basic expenses. As of December 2025, only 28.2% of active formal-sector EPF members had reached the Adequate Savings benchmark. That does not make the target impossible, but each year away from employment gives you less time to reach it.

The i-Saraan scheme lets non-employed Malaysians make voluntary EPF contributions and receive a 20% government incentive, up to RM500 per year. Amounts in this scheme in still earn the EPF dividends normally (6.15% for 2025).

Insurance: the coverage that disappears when you resign

Group medical insurance is generally tied to employment and may end when you leave your job, subject to the scheme’s terms. Applying for individual cover later may require new underwriting, and any health conditions that arise could affect premiums, exclusions or eligibility. Employment-related SOCSO contributions also stop, although eligibility for specific benefits depends on the applicable scheme and contribution history. When income stops, it also gets more difficult to continue paying for any existing personal coverage that was purchased on the assumption of a continued income.

Retirement: the loss that goes further than the years you missed

If you are taking a career break for caregiving, your retirement planning should also account for losses in terms of potential income.

Imagine taking a five-year career break at 38. That is five years’ worth of retirement savings, investments, and EPF contributions gone.. You also miss out on the compounding returns that your investments over the career gap would have generated. Not forgetting potential salary increases, commissions and bonuses that will contribute to the amount as well. 

What to Do Before, During, and After a Care Period

It can help to think about women’s wealth management across a care period in three stages.

Before the break: This is your best window to prepare. Review your expenses and separate those that need to be maintained. Evaluate your family income (if any) and determine your monthly budget. Estimate the amount of emergency fund you would need and if you need to top it up before you stop working. Review your personal and company insurance before resigning and confirm exactly when employment-linked cover ends. Do not assume group cover can be converted into an individual plan. Check if your personal coverage is correct and sufficient. 

During the break: Having a clear picture of how much you are spending during this period can help avoid problems.  Keep a daily spending tracker where you can easily input your expenses so that you are constantly aware of your financial situation. Compare that to your pre-planned budget and make amendments where necessary. You can also consider taking on freelance work or part-time gigs to earn some side income during this period.

After the break: Based on research on career break wage penalties in Malaysia, your first payslip upon returning to the workforce is likely to be lower than your last drawn pay while employed. This means that your income and benefits may not immediately return to their previous level. Review your new cash flow first, then rebuild emergency savings and retirement contributions at a sustainable pace before taking on additional commitments.

One Thing Malaysia Does Not Provide

There is one important gap you should know about: Malaysia has no caregiver pension credit. There is currently no scheme, not in EPF and not through any government programme, that counts the time you spent caring for a family member as contributing to your retirement. In practice, this means that there are no government incentives that can help you tide through this break period.

There is however, i-Suri, an EPF matching system….. 

This is where financial literacy for women is important – knowing your numbers and understanding how to work around them goes a long way in making sure that you are well-prepared financially when you step away from work.

If you are heading into a care period and need help to manage your finances, we at Uno Advisers provide personalised financial advisory services that provide you with a clearer picture of your financial situation and map out tailored strategies to help prepare you for your career break. 

Frequently Asked Questions

1. Does taking a caregiving break affect my EPF?

Yes. The impact begins as soon as you leave work. Both your contribution and your employer’s stop. Your existing balance keeps earning dividends (EPF paid 6.15% in 2025), but nothing new goes in. You may also potentially lose out on additional contributions from salary increases, bonuses, and more.

2. What should I sort out before I stop working?

Begin with your expected monthly expenses and what potential family income you would have to sustain this. Build a budget and make sure a sufficient amount of emergency funds are prepared. Then, check your insurance coverage to ensure the basics are covered during your break.

3. Why does a care break hit retirement savings harder than people expect?

Time is essential to the growth of assets, both because of additional investments from earned income, as well as compounding of returns. When one takes a career break, capacity for additional investment stops. The compounding of that additional investment doesn’t exist. So it’s not just what additional money you couldn’t set aside, but the returns that money would have generated over the years.

4. What should I focus on financially when I go back to work?

Your salary on return is likely to be lower than before the break. EMIR Research documents this pattern for Malaysian women. Focus first on rebuilding your emergency fund and restoring income protection. Next, explore investment opportunities that can help you grow your wealth further. Women’s wealth management after a care period is recovery first, growth second.

Caregiving carries a financial cost that is easy to underestimate until you see the numbers. The key financial planning decisions (insurance, EPF, savings plan) are far easier to act on before the break than after. If you are approaching a care period, Uno Advisers offers retirement planning for women and broader financial planning support across all life stages, with advisers licensed by Bank Negara Malaysia and the Securities Commission.