Navigating life as a middle-aged adult in recent years feels like juggling fire while walking a tightrope—intense and demanding. The mounting pressures aren't just about looking out for number one; they're about holding up multiple generations. Welcome to the “sandwich generation!” Picture this: you're caught between aging parents who need care and kids who aren't quite ready to fly the nest. It's like being the hearty filling in a family sandwich, but the bread slices are getting heavier by the day.

Sound familiar? You're not alone! Nearly a quarter of U.S. adults are sandwiched just like you, juggling their parents over 65 while also either raising youngsters or supporting adult children. Sure, you never signed up for this never-ending cycle of responsibility, but here you are. And as if this multigenerational balancing act wasn't enough, we've got life expectancies stretching longer than ever and economic hurdles making it trickier for young adults to strike out on their own. The squeeze is real, and it's lasting longer than any of us anticipated.

The sandwich generation isn't just a catchy term; it's a modern-day role many of us are cast into—where the love for our families meets the hard reality of economic, emotional, and physical demands. 

What Is the Sandwich Generation?

As Millennials transition into their 40s, a new trend is becoming increasingly clear: they are now the dominant demographic caught in the middle of caring for both aging parents and younger children. According to a study by Pew Research Center, 54% of Americans in this age group find themselves in the sandwich generation, a higher percentage than any other age demographic.

While the burden of care doesn't always equate to financial support, it often demands a considerable amount of time, emotional energy, and effort. A PolicyGenius survey substantiates this, revealing that 66% of adults in this sandwiched situation feel stressed about it. Remarkably, nearly a third of those surveyed said they are "very stressed."

So, what's the root cause of this mounting stress, and what can be done to alleviate it? If you find yourself nodding in agreement with these statistics, you're not alone. As Millennials take on this new role, the challenges and stressors may be considerable, but they're not insurmountable.

Sandwich Generation Challenges

Being part of the sandwich generation means different things to different people. Many adults fit the description and don’t feel the pinch nearly as bad as others. However, there are some challenges you need to be aware of and plan for as both your children and your parents get older.

Your Children

Welcome to the evolving journey of parenthood, where every age comes with its own set of challenges and price tags. Having a baby? Prepare to shell out thousands, and that's just the starting line. Don't forget the running list of essentials—food, cute outfits, and an endless supply of diapers.

Now, fast-forward to the college years. As of the 2022-2023 academic calendar, the average annual tuition cost of a public, four-year, and in-state school was $10,940. Going for the private school experience? The price skyrockets to nearly $40,000. If you haven't been saving up the college fund, be prepared for the long-term commitment of student loans.

Thinking about private education before college, or maybe you've got a full house with more than one small human? Those expenses multiply. But it's not just about dollars and cents. There are also time costs that need to be considered. Multiple children participating in multiple activities can pull parents in several directions at once. While you’re happy to attend Suzie’s soccer game or Stephen’s band recital, there are only so many hours in the day, which means you’ll have less time for other things, like…

Your Parents

At first, caring for aging parents might just be a blip on your busy radar, but don't be fooled. As the years roll on and health wanes or a parent passes away, those occasional check-ins can morph into a full-time gig. Maybe you start with casual weekly visits, but before you know it, you're the chauffeur to doctors’ appointments, the personal shopper, and the human reminder for bills and medications.

According to a Genworth survey, 40% of caregivers for adults are likely an adult child providing care for an aging parent. That same survey also found that 57% of caregivers have minor children at home, and 31% of those with children said caregiving negatively affected their relationship with their children. This shouldn’t really come as a surprise—time spent with your parents is time you don’t get with your kids.

And that’s just the time cost. If your parents need long-term care and don’t have the funds, it could fall to you, as their child, to foot the bill. Homemaker services, which include indirect tasks like cooking and cleaning, have a median cost of just under $5,000 a month. If your parent needs something like a private room at a nursing home, the cost jumps to over $9,000 a month.

What You Can Do

If you're sandwiched between kids and aging parents, navigating the financial maze can be a balancing act. However, there are things you can do now to help soften the blow and relieve some of the pressure of parenting and caregiving simultaneously.

Thinking about college savings for your little ones? A 529 plan is a specialized investment account designed to help families save for higher education expenses. It works a lot like a Roth IRA in that it allows for tax-free growth. Earnings on 529 investments are not subject to federal taxes, and withdrawals for qualified educational expenses are also tax-free.

Additionally, starting in 2024, rule changes from the SECURE Act 2.0 enable you to roll unused 529 funds into a Roth IRA in the name of the 529 plan beneficiary. There are a few stipulations to this strategy, but it’s still a great way to ensure that any money you put toward your child will still be used—even if they don’t go to college.

Switching gears to your parents, the price tag for long-term care can be eye-popping. But a chat about long-term care (LTC) insurance could be a game-changer. Medicare isn't the catch-all you might think, so LTC insurance could be the cushion your family needs.

Communication is everything. There are some wonderful benefits to family financial planning between parents and adult children. Some of these conversations may be difficult to have, but clear lines of honest, open communication can make a big difference in the overall happiness of the family.

Things can get challenging for adults who are sandwiched between their parents and their kids. For those feeling the stress of spending so much time and money providing care for both groups, please know that you don’t have to go it alone. The advisors at Wealth Enhancement Group have decades of experience and have seen just about every situation. Reach out today to find out how we can help.