The Growing Sandwich Generation

The Growing Sandwich Generation. Caring for aging parents while supporting dependent children.

The Growing Sandwich Generation: Caring for aging parents while supporting dependent children.

Perhaps you have heard the term Sandwich Generation. It’s a term that’s been around since the 1980s coined to describe a population of American adults who are “sandwiched” between the obligation of raising children and caring for elderly parents. Today’s growing Sandwich Generation adults are mostly GenXers born between 1963 and 1982 and provide not only caregiving assistance but also financial and emotional support to both generations.

According to a nationwide Pew Research Center survey, this group of Americans is growing exponentially in size. Nearly half of all middle-aged American adults between the ages of 40 and 59 have a living parent aged 65 or older and are either raising a minor child or financially supporting a grown child. And about one in seven (15%) are providing financial support to both.

The Pew survey accounts for this growing phenomenon with two very likely reasons:

1. People are living longer, and more middle-aged adults find themselves in a position where they need to provide support to an elderly parent.
2. Adult children aged 18+ struggle to maintain financial independence in today’s economy and labor market compared to previous generations. This, in turn, delays adulthood and forming their own households.

While more GenXers are devoting more resources to caring for younger children or paying for college tuition, weddings, etc. for older ones, they are at the same time caring for aging parents. If not properly managed this could create uncertainty around their own financial ability to retire.

Advice to Agents

As Empower Brokerage agents, this is just one of many important life situations you may find your clients in. The following tips will help you explain to your clients how important it is to mentally prioritize and navigate this Sandwich Generation period in their lives.

Prioritize Retirement and Ask For Professional Help

Taking care of aging parents while simultaneously raising children can be quite stressful and present many challenges. As a realistic approach, advise your clients to prioritize their own retirement savings before setting aside college savings for children or funds for parents’ long-term care. Otherwise clients risk passing on a legacy of Sandwich Generation financial problems to their own children. Talking to a financial advisor will help clients figure out everything from reaching their retirement goals, helping their parents and planning for their children’s future.

Talk To Parents Now

Although it may be an uncomfortable conversation, clients should talk to parents about what they have planned for retirement. How much do they have saved? Do they have life insurance? Get everyone’s finances out in the open and know where important documents are located, such as wills, investment accounts, life insurance policies. Knowing where parents stand financially will help with future financial planning if your clients intend to help them. It will also help with potential long-term care expenses and streamline everyone’s responsibilities in the event they become ill or pass away.