Financial Planning for the Sandwich Generation

At Seniorly, our platform assists over four million families each year in their quest to find the perfect senior living community. And over 40% of these searchers are actually adult children seeking a great living environment for their aging parents. In fact, almost 25% of U.S. households are balancing multiple caregiving roles, and the financial implications of supporting care for multiple generations can be enormous - and enormously stressful.

The Sandwich Generation

Welcome to the sandwich generation, the term used to describe adults balancing care of minor children with elder care. And while it's been a long road to get here, there are four demographic trends that have conspired to make the sandwich generation so important to the care of their elderly parents:

Adults are living longer: Data shows that almost one third of children born in 2010 will live to be a whopping 100 years old! And it's no different for baby boomers - they’re redefining what aging looks like for the rest of us. While we get more time with our loved ones, that means we're also likely to play a caregiver or care manager role for a longer period of time.

Birth Rates are declining: For all of us, caregiving responsibilities will be more concentrated among fewer people. With fewer siblings, the primary caregiver role is often relegated to a single person - often the person who is closest.

Increase of women in the workforce: we're so excited to report that women make up over half of the U.S. college-educated workforce, according to the Pew Research Center.  And while that is definite progress, many women are now faced with balancing caregiving and paid employment.

Working mothers holding steady: In 2022, the Bureau of Labor Statistics reported that working mothers participation in the labor force is holding fairly steady at just over 72%.

Multiple roles, multiplied stress

A Modern Family Index Study confirms that expectations of women as caregivers are intense.  From scheduling doctor’s appointments to confirming carpools to slicing oranges for soccer practice, caregiver duties can seem endless. And while women tend to bear more of the responsibility, both men and women are experiencing financial strain.

In addition to managing care, sandwich caregivers are also managing some of the financial burden. Sandwich generation caregivers were more than twice as likely to report financial difficulty, and 52% expect that supporting an aging parent or parents will cost just as much as supporting their children over a five year period. While many hope that Medicare will cover long-term residential care (spoiler alert; it does not), almost 20% expect to manage the financial responsibilities themselves. So how do you  manage the stress of financial planning when you are part of a multi-generation household?

3 Tips for Caregivers on Financial Planning

Assess your financial health 

Now is the time for an honest conversation about financial assets and liabilities. Understanding your parent’s finances will help you better develop a timeline that could include paid support for caregiving responsibilities, whether that is engaging in-home care or transitioning to an assisted living community.  

Yet these can be difficult conversations to manage, as the “role reversal” is front and center. As CEO of Seniorly Arthur Bretschneider shares “the dynamic of these conversations can be complicated, as the unspoken center of the conversation is really about the reality of aging”.  Bretschneider recommends having shorter and more frequent conversations instead of “trying for resolution in a single sitting”.  

Stress less, save more 

For many, this is the most difficult piece of advice to enact.  Most financial planners will tell you the importance of taking advantage of benefits programs like 529 plans, 401K programs, HSA spending accounts, and deferred compensation plans.  Early savings habits are one way to ensure that you are adequately equipped for your older years.

If your parent is living with you, it might even make sense to have a conversation about financial contributions to the household. Some caregivers will ask for a small contribution to cover food, medical or other supplies, and even rent. It may not always be comfortable, but it can be a reasonable request in some cases.

Consult an expert:

Three resources which can support sandwich generation families feeling the financial pinch: 

Financial planners: The National Association of Personal Financial Planners (NAPFA) and the Certified Financial Planning Board (CFP.net) offer helpful databases to find financial planners. A good financial planner will help you balance your emotional and fiscal commitments and ensure that you are protected.  

Senior Living Advisors: Certified Senior Advisors are expert at working with older adults and their families to build support systems for sandwich generation caregivers. They can assess overall health, coordinate in-home care and even help you decide when it’s time to consider a move to a senior living community. They also have excellent connections with elder law professionals, financial planners, realtors and so much more.  They are paid by referrals, so they are free of cost to the families with whom they work.

Geriatric Care Managers:

A Geriatric Care Manager (GCM)is a professional who will assume responsibility for oversight of certain elements of care. They don’t deliver care themselves but they can source caregivers, manage schedules, and ensure payment. While this is not always the most cost-efficient option (GCMs generally charge an hourly fee plus a percentage of care services), they can help caregivers through crisis by assuming some of the mental load that sandwich generation caregivers tend to carry.