Planning Money Around Career Breaks

How career breaks for childcare or caregiving affect lifetime earnings and savings, and practical ways to protect finances before, during and after a break.

Many women take career breaks for childbirth, raising children or caring for elderly relatives. These breaks can have large long-term financial effects.

The hidden costs

Lost income during the break.
Lost retirement contributions, like EPF or NPS.
Slower career progress and lower pay after returning, sometimes called the motherhood penalty.
Lost compounding on savings that weren’t made.

Before the break

Build a dedicated fund to cover expenses.
Check maternity benefits: India’s Maternity Benefit (Amendment) Act, 2017 provides 26 weeks of paid maternity leave in eligible establishments, and requires crèche facilities for firms with 50 or more employees.
Continue insurance coverage.

During the break

Keep investing small amounts, even if the partner contributes on your behalf.
Consider contributions to your own NPS or PPF.
Stay connected professionally through courses or part-time work.

Shared responsibility

Couples can treat childcare as a shared cost: the working partner can contribute to the other’s retirement savings during a break.

Returning to work

Many companies run returnship programmes for women re-entering the workforce.
Update skills.
Negotiate pay based on your value, not your gap.

Flexible work

Remote, part-time and flexible jobs can help women stay in the workforce during caregiving years.

The shared SIP

During his wife's three-year break to care for their children, a husband sets up an SIP in her name from his salary. When she returns to work, her retirement savings haven't stalled.

Thinking a career break only costs the salary during the break

Breaks also reduce retirement savings, compounding and future pay.

Key takeaways

Career breaks reduce income, retirement savings and future pay.
India's 2017 law provides 26 weeks of paid maternity leave in eligible workplaces.
Keep investing and stay professionally connected during breaks.
Returnship programmes and flexible work help women re-enter.