Advanced medical treatments and healthier habits have enabled people to live longer. That means a longer retirement, one that many people can’t financially afford, especially when health care costs are factored in.

On the flip side, people are having children later in life. Plus, student loan debt and a tight labor market for entry-level professionals have resulted in more young adults living at home than ever before.

Caught in the middle of these trends is what is called the sandwich generation.

What is the sandwich generation?

The sandwich generation refers to people in their 40s to 60s, who care for and/or financially support both their parents and their children. According to the Pew Research Center, about 15 percent of middle-aged adults are providing financial support to both an aging parent and a child.

People who belong to the sandwich generation may have one or two aging parents and an adult child or two living under the same roof. They may be footing the bill for food and other necessities and spending more on utilities than they would without the extra residents. Members of the sandwich generation may also be helping pay or provide care for their parents. Many are covering the cost of their children’s college tuition or student loan payments.

Sandwich generation stress and issues

All things considered, this can create a considerable amount of stress, among other issues. In fact, in a 2018 MassMutual study, 27 percent of respondents say being in the sandwich generation adds financial and emotional stress on their families.

The study also revealed that:

  • 55 percent perform chores for parents and/or in-laws
  • 49 percent manage parents’ and/or in-laws’ finances
  • 47 percent spend, on average, two hours per day caring for parents and/or in-laws
  • 31 percent are financially responsible for parents and/or in-laws

A similar survey in 2019 by PNC Financial Services found that, among respondents, 8 percent have financial responsibilities for both parents and children, while 45 percent support one or the other.

This burden can cause a number of stressors, including burnout, depression, guilt, and isolation. People caring for parents and children also have financial anxiety. The time commitment means less time spent with spouses, friends, and hobbies. sandwich generation members can also struggle with their careers and they ultimately may have psychological issues as they struggle being pulled in multiple directions every day.

Experts suggest that people caring for two other generations get help. Those who live under your roof should be doing their share of chores.

You can also make life easier by asking your employer for a flexible work schedule or ask to work remotely when needed.

One thing you want to be careful of doing is leaving your job to care for parents. The time spent away from the workforce will not only cost you income, it can affect your retirement savings and future career opportunities. Identify caregiving options, such as free or low-cost services, that enable you to maintain your earning potential.

The struggle to save for retirement

One of the areas in which being a sandwich generation member can hurt most is saving for retirement. After all, if you’re spending a large chunk of your budget on elder care AND child care, there likely isn’t much available to save for retirement.

The PNC Financial Services survey found that 38 percent of sandwich generation members do not have an emergency savings fund. Also, a third have less than $25,000 saved for retirement.

Experts advise that if you find yourself in this situation that you find a way to prioritize retirement savings. Otherwise, you may become financially dependent on your children during your retirement years. Don’t hesitate to ask healthy parents and teenage and adult children to contribute financially.

Why the sandwich generation needs disability insurance

So, what do all of these sandwich generation statistics mean?

In addition to prioritizing retirement savings, people who belong to the sandwich generation should also have disability insurance. This is important for two reasons.

First, your current financial obligations may have prevented you from saving an emergency fund. Therefore, if you are unable to work because of an injury or illness, you may not be able to get by very long before your money runs out.

Second, the more people who depend on your financial support, the more you need the safety net of disability insurance. Whether a disability keeps you out of work for six months or six years, the loss of income would be devastating to you, your parents and children. Having an individual disability insurance policy means having an income to pay your bills and support your family during a period of disability.


Joel Palmer is a freelance writer and personal finance expert who focuses on the mortgage, insurance, financial services, and technology industries. He spent the first 10 years of his career as a business and financial reporter.

The information and content provided herein is for educational purposes only, and should not be considered legal, tax, investment, or financial advice, recommendation, or endorsement. Breeze does not guarantee the accuracy, completeness, reliability or usefulness of any testimonials, opinions, advice, product or service offers, or other information provided here by third parties. Individuals are encouraged to seek advice from their own tax or legal counsel.

Money
Published February 29, 2020