Financial Steps That Can Help the Sandwich Generation Cope

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published 2 January 2025

The “sandwich generation” refers to middle-aged adults who are challenged with supporting their own children and aging parents financially, physically or both. Many individuals, particularly members of Gen X, may be experiencing this phenomenon. In fact, a 2022 study from the Journal of the American Geriatrics Society found that there may be up to 2.5 million people in this situation in the United States.

Being stuck in the middle like this can place a lot of strain on your time, your finances and your mental health. It also may have an impact on your financial and personal plans for the future. As with most parts of life, being prepared, having a well-designed financial plan and understanding what resources are available to you can help.

1. Evaluate your financial plan

As a caregiver for your parents while still caring for your own children, you may experience an increased financial burden. You may be juggling additional expenses for medical care for your mom or dad or moving an aging parent into your home, while at the same time helping your children save for college or supporting them as they enter young adulthood.

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When presented with this situation, I recommend taking time to re-evaluate your financial plan, preferably with a financial advis e r, to analyze your goals and how they may be impacted.

For example, you may think that quitting your job is your only option. But this should be avoided, if possible, as it would mean halting the progress you are making toward your own retirement goals. And there are other alternatives, such as going part-time or working remotely. You could also consider hiring a home health aide or adult day care to fill in the gaps. In addition, your employer may grant you a paid or unpaid leave of absence that would at least allow you to return to your job when your situation changes.

With reduced income or increased expenses, it is also important that you monitor your budget and ensure you are still investing in your financial future. Even if your budget may be tighter, try to continue contributing to your retirement funds and avoid pulling from these to pay for added expenses.

2. Tap into available resources

There are some government resources available to caregivers, but most require that you or the person you are caring for is on Medicaid or is a veteran. If your loved one has long-term care insurance, there may be some coverage for care services, so you should check with their insurance agent.

Several tax benefits may also apply. For example, you may be able to claim a sick or older loved one as a dependent on your income taxes. This can qualify you for the Credit for Other Dependents, which offers a maximum of $500 per dependent. Those who spend on caregiving for a relative who lives in their home can also claim up to $3,000 in costs. A tax expert can help walk you through the specifics and figure out whether you might qualify.

It’s also worth speaking to a benefits representative at your employer, as they may be able to point you in the direction of resources and policies to support child and eldercare.

3. Communicate with your children and relatives

When it comes to caregiving, communication is key. These changes can be difficult for everyone in your family, so it’s important to be sympathetic to any concerns they may have.

It’s important to remember that you don’t have to go it alone. Adult siblings or relatives can and should be tapped for assistance, which may require some honest conversations. There are many ways others can help, even if you are the primary caregiver — whether it’s splitting duties entirely, providing financial help if they can’t be there physically or having someone step in every so often so you can have a break.

Additionally, a parent who now has the added responsibility of caring for an older loved one may not be able to physically and financially support their child at the same level as they once did. It’s important to be open about this, particularly to teenage and young adult children, about any changes they can expect.

4. Take care of yourself

Living in the sandwich generation and caring for multiple family members can be extremely taxing, both mentally and physically. It’s important to ask for help when you need it and to leverage a “team” of loved ones and professionals. From a financial perspective, an adviser and tax professional can help you make appropriate moves regarding your finances through this challenging period.

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Leila is Regional President, Senior Managing Director at MAI Capital Management, based in Charlotte, N.C. She has over 30 years of experience in financial services working extensively with high-net-worth individuals and families. Leila joined MAI after the acquisition of Queens Oak Advisors, where she served as the Managing Partner and Director of Client Service.