Staying home to parent can cost more than just salary

First-time mother Janet An is trying to make a tough decision that millions of American workers may face at some point in their lives.

An, who is taking a break from her law career to raise her 5-month-old daughter, is taking child care costs into account when thinking about when -- or whether -- she'll go back to work.

In a country short on both family leave and child care-friendly policies, starting a family often comes with tough financial choices. One-third of U.S. families spend more than 20 percent of their income on child care, according to a recent survey.

With those kinds of costs, it's not surprising more and more parents are reconsidering whether to work at all while their children are young. About 16 million women aged 25 to 54 -- prime working years -- have dropped out of the labor force altogether. That's twice the number of men in that situation.

"If the cost of child care is going to eat up my entire salary, then it might make more sense for me to just continue to stay home with her," An told CBS Los Angeles' Danielle Nottingham.

Michael Madowitz also faced the same choice after having two children. Madowitz, an economist, built a calculator to add up the lifetime costs of staying at home. He found the costs involve far more than just salary.

"It actually affects how fast your wages grow over time and has really significant effects on retirement savings," he said.

When a parent takes a break from working, the time spent not pulling a salary also impacts retirement savings and future pay growth. It could also result in lower Social Security benefits, which can have particularly negative repercussions for lower-income workers.

And "if you're really high-income you're going to lose a lot of money because you are going to make a lot of money," Madowitz said.  

For example, a 30-year-old woman earning $50,000 year would lose $530,000 over her career in wages, benefits and raises if she takes off four years to care for a child. A man would lose $623,000, since men tend to earn more than women as they age.

An was surprised by the figures she calculated.

"It's more than I had anticipated, especially the lost wage growth," she said.

Of course, not everything is quantifiable, and few parents would be able to put a dollar figure on time spent raising their children. But as the calculator demonstrates, the hard choices many workers face day-to-day can have repercussions far into the future.