Caring for Kids and Parents? 3 Steps to Help Fund That (and Save for Your Retirement), From a Financial Planner
Millions of Americans in the sandwich generation need to cover expenses for kids and aging parents while saving for their own retirement. These three tips can help make it less of a struggle.
Being responsible for your parents or your children can be difficult, and it's made even more stressful when you're doing both at the same time.
But that's the reality of the sandwich generation – those working middle-aged adults who are simultaneously raising their children and supporting aging parents.
According to a 2022 study from the Journal of the American Geriatrics Society, there may be up to 2.5 million people in this situation in the U.S. And that is likely to increase as the population ages. An estimated 73 million Americans will be 65 years or older by 2030.
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For those in the sandwich generation, providing assisted living or long-term care for their parents while paying for living expenses or education for their children can lead to depleted savings and delayed retirement.
While this can be overwhelming, there are steps that those stuck in the middle can take to get their finances back on track.
1. Review your spending
One of the first things you should do is review your spending. This could feel overwhelming, so I always tell my clients not to try to fix everything at once. It's fine to take your time for this revamp so you can see exactly where your money is going.
If there are places you realize you need to cut back, like going out to eat or streaming services, start small. Trying to get rid of all of your fun money at once could backfire.
Then, ask yourself what the most important financial goals are to you. Do you want to save for a house? Add to your child's college fund? Do you need to pay for your parents' long-term care? What level of assistance will they require?
Once your goals are set, saving money will feel more intentional and will inspire you to keep moving forward. If possible, automate where you can. Setting and forgetting it will help this money go out of your account before you have a chance to spend it.
2. Prioritize your retirement
How do you feel about your own retirement accounts? Are you on the right track? It may be tough to put yourself first in this situation, but it is extremely important and will be the best way to ensure your golden years are stress-free.
Make sure you know what you are spending now, but keep in mind that some people end up spending more in retirement because of additional travel or recreational expenses. Having a rough idea of how much money you'll need to retire comfortably will help you set an accurate savings goal to work toward. That will ensure you can still provide a comfortable life for your children while taking on the added cost of caring for your parents.
I recommend saving 10%–15% of your income for retirement if you plan to keep your current standard of living, and to make these contributions automatic every month.
Does your company offer a 401(k) plan? Take advantage of it and make sure you're saving at least enough to get any company match being offered to you. In 2026, the maximum contribution to a 401(k) is $24,500. If you're over 50, you can save an additional $8,000.
While you may be thinking more about your parents' retirement accounts as you begin taking care of them, you also need to ensure that you focus on your own. Your future self will thank you.
3. Build your emergency fund
Between everyday expenses and saving for your future, you may feel like you can't afford an emergency fund. However, any extra cash you can set aside is worth it. It doesn't matter if it's $10 or $100. The most important thing is to make saving a monthly habit.
Look for a high-yield savings account that offers higher interest rates, such as a money market account or online savings account. Many of these offer higher-than-normal returns, especially compared to traditional brick-and-mortar banks.
Once you have a healthy emergency fund, do not be tempted to withdraw from those accounts. Make sure you commit to only withdrawing money for true emergencies, such as a car repair or an unexpected layoff, and not for any unexpected caregiving expenses.
If you do find yourself using money from your emergency account, remember to immediately start building those savings back up, so you'll have money to cover any future emergencies.
Don't try to do this alone. Delegate the tasks you can and ask for help with any of the caregiving duties. And when you struggle with balancing finances between yourself, your parents and your children, seek help from an expert.
Many financial advisers have worked with clients in this same situation and can be a lifeline — helping you keep your financial future while still taking care of those you love.
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