The average American spends hundreds or even thousands of dollars per month in childcare costs, forcing parents to choose between working or staying home to avoid losing money.
First time mom Janet An is taking a break from her law career to raise 5-month-old Ellie, and says the cost of daycare or a nanny will be a factor when she returns.
However, economist Michael Madowitz says that's not always the best choice. Faced with the same decision after having two kids, Madowitz built a wage calculator to measure the impact of staying home to care for his children. He found the losses add up to more than just salary for moms and dads.
The calculator takes factors-such as age, gender, current salary and how long you take off; then tallies how much you will potentially lose in wage growth, retirement benefits, stock options and salary over your lifetime.
Take the example of a 30-year-old woman earning $50,000s a year. She stands to lose more than $730,000 in benefits, raises and wages if she stays home from work for five years.
Janet tried the calculator to see the cost of taking a year off from work, and she says seeing the big picture will help her make the right decision for her family.