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The sandwich generation: Tips to protect your financial well-being

Shelly  Gigante

Posted on May 31, 2023

Shelly Gigante specializes in personal finance issues. Her work has appeared in a variety of publications and news websites.
Millennials and sandwich generation
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Define what the sandwich generation is and how helping your aging family members can undermine your own retirement readiness.

Suggest four ways that you can be there for your parents without supporting them financially.

Offer tips for setting ground rules with your parents.


Sandwich generation caregivers, which is defined as those who support their children and elderly parents at the same time, often describe a state of chronic fatigue as they juggle the demands of family responsibilities.

But caregivers who are stretched thin, especially when they were forced to exit the workforce prematurely, also often experience a financial squeeze that can wreak havoc on their retirement readiness. The degree to which depends on the type of help they provide.

Some bring aging loved ones into their home permanently and provide daily care, while others help out temporarily during periods of illness or recuperation. Caregivers may also provide monetary assistance — subsidizing their parent’s living expenses, paying down their debt, covering medical bills, and helping them manage their financial affairs. (Related: When Mom or Dad moves in)

The age of the sandwich generation caregiver can also affect their future financial well-being, with younger adults experiencing a potentially greater opportunity cost, said Brock Jolly, a financial professional with Veritas Financial in Tysons Corner, Virginia.


  • A 35-year-old adult who provides $2,000 per month to an aging parent for 10 years would have spent $240,000 in cash in the form of financial assistance.
  • Had the adult child been able to invest those dollars in a mutual fund that achieved an average annual return of 6 percent instead, they could have amassed roughly $330,000 in savings over the course of that decade.

The long-term financial implications are greater still. By depriving those dollars of a chance to deliver average annual total returns of 6 percent over the next 20 years until they retire, the adult child would have lost the opportunity to accumulate more than $1 million— money that could have been used to fund their retirement or finance other goals, like buying a house (a potentially appreciating asset) or paying for their children’s college education.

“I think that having a good understanding of the trickle-down impact of helping one’s parents — whether it’s financial, emotional, or physical — is critical,” said Jolly.

The cost of caregiving

According to the latest research from AARP, some 43.5 million Americans provide care for an adult age 50 or older, a number that is on the rise as the population ages, the long-term care system experiences workforce shortages, and states double down on efforts to facilitate home- and community-based services for aging adults.1

The prevalence of caregiving for an adult family member has climbed significantly since 2015 among all racial/ethnic groups, educational levels, work statuses, genders, and nearly all generations, primarily among millennials, Generation X, and baby boomers.2

Most do so by choice, because they believe it’s the right thing to do and wish to be there for their loved ones. But there’s no denying the financial impact that caregiving can have.

The average family caregiver spends roughly $7,000 per year in out-of-pocket expenses, a number that can spike to $12,000 annually for those who live an hour or more aware from the care recipient, according to the AARP.3 (Learn more: Keeping caregiver costs contained)

The caregiver role can also affect income potential, especially when adult children trade in a more demanding (and more lucrative) career for one that permits them greater flexibility.

Women are at greater risk of experiencing the financial backlash of caregiving. Statistically, they are more likely than men to step out of the workforce to care for their aging parents. That reduces both their household income and retirement savings, which puts them disproportionately at risk of outliving their savings as they age, especially for those who are single. (Learn more: 5 reasons why women should be selfish...financially)

According to the National Alliance for Caregiving, some 61 percent of all caregivers in the U.S. are female.4

Caregiving can levy an emotional and physical toll, as well. Adult children who provide full-time care to an aging parent, particularly those who have suffered a cognitive or physical decline that demands hands-on care, often neglect their own health care and report feeling socially isolated, leaving them more vulnerable to developing health conditions of their own. (Related: Surviving in the sandwich generation)

“I have a friend whose father has Alzheimer’s and has lived with his family for the last five years,” said Jolly. “It’s not a financial issue, but rather a physical and emotional one. They have three young kids and his wife quit her job to be the caregiver. They would both say they wouldn’t have it any other way. But you do have to think about it from an economic perspective. There are things they cannot do because their family is taking care of their dad.”

Finding resources

Helping your parents or aging relatives, however, need not derail your own financial future. There’s much you can do as an adult child to support your loved ones, including helping them manage their monthly budget, handling bill paying responsibilities, and researching public programs to help them cover their debts.

The National Care Planning Council provides a list of senior services and supports on its website. Among them:

  • The Eldercare Locator connects older Americans and their caregivers with information on senior services available through state and local agencies on aging and community-based organizations that serve older adults and their caregivers.
  • The National Council on Aging offers a BenefitsCheckUp tool that lists more than 2,500 benefit programs available nationwide to help seniors pay for food, medicine, and other expenses.
  • The Senior Community Service Employment Program, through the U.S. Department of Labor, helps seniors who are eager and able to work find paid job opportunities.

“Supporting your parents doesn’t necessarily mean paying their mortgage or rent, or buying their groceries,” said Jolly. “It could just be helping them to make smart decisions and understanding the tools available to them.”

For example, perhaps they can tap into the equity in their home through a reverse mortgage, which might enable them to age in place and pay for needed care. (Learn more: Reverse mortgages: What you need to know)

Adult children might also consider purchasing permanent life insurance on their parents. Such policies can make it possible for adult children to support their parents and even put their career (and income) temporarily on hold while they provide care, knowing that the costs they incur will be replenished when their loved one passes away. (Learn more: Buying life insurance for your parents)

As with all major financial decisions, it’s wise to consult a financial professional before purchasing any products to discuss options and alternatives.

Keep communicating

Above all, those in their 30s, 40s, and 50s who are about to join the sandwich generation (or are already in it) should invite honest dialogue about the state of their loved one’s financial affairs. The objective is not to pry, but to be sure that their family member has their financial house in order, including adequate savings, estate planning documents, and instructions for end-of-life care when the time comes. (Learn more: Tips for talking money with your aging parent)

They should also discuss expectations. Perhaps your family is not positioned, for whatever reason, to provide financial support or take your parents into your home. This needs to be made clear to avoid surprises and allow time to plan.

Such conversations can be delicate, and many older adults still consider financials to be taboo. It often helps to recruit an independent third party or financial professional who can ask the right questions, review investment choices, and keep emotion off the table.

Protect your own financial security

As you reach out to assist your aging loved one, be sure to stay focused on your own financial security as well.

Manage your expenses, where possible, so you can continue to fund your retirement account. Maintain an emergency fund worth three to six months of living expenses. And avoid cosigning on a mortgage (or any loan) for your parents, which would become your responsibility if they should fail to pay.

Finally, lay the ground rules with your parents, establishing a limit to how much you are willing to contribute to their monthly expenses (if any). If your parents struggle to stay on budget, your financial assistance may come with the caveat that you control their finances. (Learn more: How to help parents in retirement while preserving your own plan)

And before you peel off a portion of your income to help your aging parents, be sure they are taking advantage of all discounts and tax credits for which they may qualify, including prescription drug discounts, food assistance programs, housing vouchers, property tax and utility bill assistance, and Supplemental Security Income, which is offered to seniors 65 and older who have limited income and assets.

Medicaid also provides help paying Medicare premiums, plus additional health benefits beyond Medicare, to seniors with limited income and assets.


Most who support their children and aging parent at the same time say they wouldn’t have it any other way, but caregiving comes at a cost.

To minimize impact to their financial well-being, sandwich generation caregiversshould explore all possible programs for which their senior parents may qualify, set expectations early, and stay focused on their own financial goals.

Discover more from MassMutual…

Retirement: How to preserve it while helping your parents

Estate planning: 6 mistakes you might make

Three ways to pay for long-term care

Need a financial professional? Find one here

This article was originally published in April 2020. It has been updated.


1 National Alliance for Caregiving and AARP, “Caregiving in the U.S. 2020,” May 14, 2020.

2 National Alliance for Caregiving and AARP, “Caregiving in the U.S. 2020,” May 14, 2020.

3 AARP, “Family Caregivers: Is a Personal Services Contract Right for You?” October 31, 2022.

4 National Alliance for Caregiving and AARP, “Caregiving in the U.S. 2009," Washington, D.C.” 2009

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