The High Cost of Becoming a Stay-At-Home Parent
February 17, 2026
Do-it-yourself child care seems like a financial no-brainer. But it isn’t really free.
Everyone knows that child care can be expensive. Depending on where you live, annual costs can range from 15% to 25% of annual income. If the cost of child care would be equal to or slightly more than what you currently earn, it seems like an easy choice, at least on the surface. But the real cost adds up to much more than the tradeoff between paying someone else to provide childcare during the workweek and the lost income from quitting a job to stay home to take care of the kids.
There are a number of less obvious costs associated with staying out of the workforce. These can all be grouped under the heading of opportunity costs. For example, in addition to losing your paycheck, you'll also be losing employee benefits, including any employer contribution to your 401(k), i.e., free money as well as opportunities for raises. Plus, the longer you stay out of the workforce, the harder it becomes to get back in—and the greater your total income loss becomes.
Researchers at the Center for American Progress have developed a calculator that gives you a better idea of how much you'd really be giving up in order to stay home with the kids. You enter your gender, age, current salary, when you started working full time, when you plan to stop working, how long you intend to stay out of the workforce, your planned retirement age, along with both you and your employer's current 401(k) contributions. Then the tool calculates how much you are likely to lose in terms of total lifetime earnings.
Here’s a concrete example. Imagine that a 29-year-old woman, who started working at age 22 and currently makes $60,000 a year, wants to step out of the workforce for five years to focus on family. She contributes 6% of her salary to her 401(k) and receives an additional 3% contribution from her employer. The five years spent out of the paid workforce would cost her $300,000 in income, along with a potential $250,000 in wage growth and $210,000 in retirement assets and benefits over the course of her life. Her total loss: $760,000.
Mothers face an additional penalty. Time out of the paid workforce often results in a much smaller Social Security retirement benefit, which is already comparatively reduced by the gender wage gap. Benefits are calculated based on the average of the highest 35 years of income. Years spent out of the paid workforce additionally reduce the total amount of income used to calculate that number. On average, women spend roughly 10 years providing unpaid caregiving, according to a 2025 Insure.com report, which estimates the value of a stay-at-home mom’s work at $145,235 per year—a 4% increase from the previous year.
When you compare the total opportunity cost with the $55,000 an average American family would pay for five years of day care, the answer to that no-brainer decision might do a 180 and make keeping an existing job the most financially prudent option.
But deciding whether to become a stay-at-home parent isn’t a purely financial decision. Many factors and personal preferences enter into it. And as workplaces offer better family leave policies, more flexible work schedules, and remote work options, choosing between paying an ongoing necessary expense today or facing a potentially huge financial loss over the long term may become less of an ‘either/or’ choice. The right answer will vary for every family. Just be sure you're looking at the big picture and thinking about the long term when making the choice for yourself.
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