Caught in the Middle: Financial Stresses Facing the Sandwich Generation

VOLUME 17 | ISSUE 3

The term "sandwich generation" refers to individuals often around my age who are simultaneously caring for their aging parents while supporting their own children. This unique position presents a myriad of financial and emotional challenges. I have lived in the sandwich for the last decade, so I know it well.

Understanding the Sandwich Generation's Financial Landscape

Members of the sandwich generation often face the dual pressures of providing for their families and for their children's education while taking on a greater role managing their parents' healthcare or finances.

The senior generation values their independence and never wants to be a burden, yet they often recognize the inevitable passage of time and the changes it brings.

Even with plenty of assets, this situation is stressful, but according to recent studies, nearly 1 in 4 adults in the sandwich generation provide financial support to both generations. This can lead to significant financial stress, requiring careful planning and strategic advice.

Key Challenges

1. Healthcare Costs

   With aging seniors, healthcare expenses can be unpredictable and substantial. We help clients plan for these costs, including long-term care planning (with or without insurance) and Medicare planning. Planning for worst case scenarios can be scary but can also lead to more honest conversations.

   
   

2. College Tuition and Childcare

   For those with younger children or college-bound teens, education and childcare expenses remain a significant burden. We help clients of both generations plan to fund education expenses in the most tax efficient way. There are often opportunities for the senior generation to help with education costs.

   
   

3. Retirement Planning

   Balancing immediate financial responsibilities with long-term goals is essential. We work with clients of both generations to ensure they balance their current needs and their future financial risks.  We help clients to not ‘miss out, not run out, and not stress out’.

   
   

4. Emotional and Financial Stress

   Beyond the numbers, the emotional toll of caregiving—combined with financial strain—can lead to burnout, anxiety, and strained family relationships. We work hard to be a trusted third party to help everyone through this stressful time.

   
   

Strategies for Relief

While these challenges are daunting, there are steps that can help:

• Create Comprehensive Financial Projections

  We work with clients of both the senior generation and the sandwich generation to project future income and expenses so that everyone can understand the risks to achieving goals and can plan accordingly. 

  
  

• Explore Support Resources

  Look into government programs, community services, and employer benefits that can ease caregiving burdens.

• Have Open Family Conversations

  Discuss financial expectations and responsibilities of both parents and children to set realistic boundaries and plans. This is the most important strategy and often the most difficult, especially when there are multiple children.

• Protect Your Retirement

  For the sandwich generation, continuing consistent contributions to retirement accounts, even if they are small, can make a big difference over time.

Final Thoughts

As children, we are dependent on our parents and as we grow, we strive to become independent. Transitioning to independence is stressful for both children and parents.

Those in the sandwich generation face the double demands of navigating our children’s transition to independence while simultaneously supporting our parents as they begin to relinquish independence. 

Being a financial advisor to the sandwich generation requires a deep understanding of these unique challenges and a compassionate approach to financial planning. By providing tailored advice and support, we help individuals achieve financial stability and peace of mind. If Armor can help you or someone you know in navigating the challenges of the sandwich generation, please don’t hesitate to reach out.