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The Sandwich Generation — How to Handle Competing Financial Priorities

Many couples today are facing a unique challenge: raising their nuclear family while also helping support their aging parents. These families have come to be known as the sandwich generation.

According to data compiled by the Pew Research Center, about a quarter (23%) of adults in the U.S. now find themselves in this situation — raising one or more children while also providing financial support to parent. Also, about half (47%) of U.S. adults in their 40s and 50s have a parent age 65 or over and are raising a young child or supporting an adult child financially at the same time.

Caregiving Support, Too

This support often goes beyond finances to include caregiving activities such as driving parents to doctor’s appointments and helping them with daily activities like eating, bathing and dressing. Adults who are helping their parents spend an average of more than two hours every day providing this kind of hands-on care, according to the Pew Research Center.

Here are some more statistics related to the sandwich generation:

  • 71% are between the ages of 40 and 59 while just 10% are over 60 and 19% are under 40.
  • Just 28% of those who help support their parents financially say they are comfortable with their own financial situation.
  • 73% say they have provided financial support to a grown child at some point during the past year.

Communication is Key

So how can you deal with the financial and emotional challenges presented by the sandwich generation? The first step is to talk openly and honestly with parents and adult children about what kind of support you realistically can and cannot provide.

It’s understandable that many people want to provide as much support to their children and parents as they can, especially parents who may have made sacrifices for their kids while they were growing up. Sometimes people feel like they “owe” this to their parents now that the shoe is on the other foot.

However, there are usually practical limits to the amount of support (both financial and caregiving) that can be provided. This is especially true for couples who are raising young children. Time that’s spent helping parents is time that can’t be spent raising and nurturing kids. Every family must find the right balance for their situation and dynamics.

The same thing goes with finances: Funds that are devoted to helping meet parents’ living expenses and medical bills can’t be contributed to a child’s college savings fund or used to pay for summer camps or sports leagues.

Don’t Jeopardize Retirement Security

It’s also important to consider how providing financial support to parents and adult children could impact your future financial security during retirement. As they think about where to make adjustments in the budget to accommodate this support, the first thing some couples do is reduce or even eliminate their retirement savings. 

But this could prove financially dangerous down the road. It might eventually even place your children in the same boat you’re in right now: having to help support you financially because your retirement savings are inadequate. It’s important to talk with both parents and adult children about these kinds of tradeoffs and make decisions together that are in everyone’s best interest.

During these conversations, parents should be willing to share the particulars of their financial situation with their adult children. This includes things like income, expenses, assets and debts. Some parents might balk at this, but in fairness, children usually have a right to know these details if they’re going to provide financial assistance.

Once these numbers are out on the table, you can see exactly how much financial assistance parents may (or may not) actually need. (The same thing holds true for adult children.) Then everyone can work together to create a budget that meets the parents’ or adult child’s financial needs without overly taxing your financial situation.

Don’t Put It Off

The sooner these conversations take place, the sooner you and your family can devise a plan for financial and caregiving assistance that works for everybody. Early preparation can reduce some of the awkwardness and strain that sometimes accompany these situations. 

Give us a call if you would like to discuss these challenges in more detail. We can help you devise a plan that’s right for your family.


The commentary is limited to the dissemination of general information pertaining to Frontier Wealth Management, LLC’s (“Frontier”) investment advisory services. This information should not be used or construed as an offer to sell, a solicitation of an offer to buy or a recommendation for any security, market sector or investment strategy. There is no guarantee that the information supplied is accurate or complete. Frontier is not responsible for any errors or omissions, and provides no warranties with regards to the results obtained from the use of the information. Nothing in this document is intended to provide any legal, accounting or tax advice and Frontier does not provide such advice. This information is subject to change without notice and should not be construed as a recommendation or investment advice. You should consult an attorney, accountant or tax professional regarding your specific legal or tax situation.