Financial strategies for the sandwich generation
The US population is older than it’s ever been, and long-term care costs continue to rise.1 Research shows that Americans in their 40s are most likely to be considered part of the “sandwich generation,” a cohort of adults who are caring for a parent 65 or older and raising at least one child younger than 18 or providing financial support to an adult child.2 In fact, over half (57%) of caregivers of an elderly or sick adult also care for young children under age 18.3
Even if you’re not currently a member of the sandwich generation, there’s a chance you could be soon. By 2050, the number of Americans aged 65 and older is projected to increase to 86 million.4 Sadly, gaps in Medicare and Medicaid coverage and rising elder care costs may leave many without care options, placing the onus on family members and loved ones to provide support.5 According to our research, 31% of sandwich generation caregivers report fair or poor financial health. In fact, almost three times as many women as men report fair or poor financial health — 55% and 20%, respectively.6 Having a close relationship with extended family is a privilege that can enrich the lives of everyone involved; however, taking on responsibility for a parent can create both emotional and financial stress. Proactively preparing for the possibility of joining the sandwich generation can help you enjoy your time with your aging parents while also balancing your own retirement goals. The following tips will help you get started.
Talk to your parents about finances
You may feel uncomfortable talking to your parents about their finances, but doing so can benefit you and them. Begin by letting them know you’re coming from a place of love and reiterating that you want the best for them. You’ll want to discuss important questions, such as how much retirement income they expect to have, and how they plan to address issues like housing and medical expenses. This will help everyone gain a clear understanding of their big-picture plan.
Explore available resources
If you believe you’ll be your parents’ primary caregiver soon, begin looking into available assistance. Depending on your parents’ income, they may be eligible for benefits through your state’s aging services division, Medicare, and other elder care resources.
Stay on track with your savings
When your finances are spread thin, it’s easy to put your savings strategy on the back burner. However, continuing to save is critical for helping protect your financial future. Make savings a priority and consider automating your retirement contributions. This will help ensure you don’t fall behind.
Protect your well-being
Multigenerational caregiving is linked to higher rates of stress, depression, anxiety, and even faster physical decline, especially when care exceeds 20 hours per week.7 These demands often leave little time for self-care. Make it a priority to find practical strategies that protect your well-being.
Create a spending strategy
Avoid relying on credit or regularly spending more than you can afford. Work with your family to create a realistic budget and make sure everyone commits to sticking to it. Don’t forget to account for your savings strategy and give yourself some wiggle room for unexpected expenses.
Protect yourself and your family
Is life insurance part of your financial strategy? It can help ensure your family is taken care of if the unthinkable happens. If you’re a policyholder already, you’ll want to make sure you and your family are covered, and your policies are up to date.
Begin preparing today
Speaking to your parents early on and maintaining open communication can help you avoid unpleasant financial surprises. It will also allow you time to find out about your assistance options. In the meantime, begin preparing yourself by saving, budgeting, and keeping your insurance up to date. Not only will this help reduce stress, but it can also help grow the resources your children may need if they join the sandwich generation one day by caring for you.
SOURCES:
1 Fact Sheet: Aging in the United States, Population Reference Bureau, January. 9, 2024
2 More than half of Americans in their 40s are ‘sandwiched’ between an aging parent and their own children, Pew Research Center, April 8, 2022
3 Guardian’s 14th Annual Workplace Benefits Study, 2025
4 Facing financial ruin as costs soar for elder care, Fortune Well, November 16, 2023
5 ibid.
6 Guardian’s 14th Annual Workplace Benefits Study, 2025
7 ibid.
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