6 minute read

Sandwich Generation Meaning & Financial Planning Tips

If you are part of the sandwich generation, caring for both your children and your parents, you have some unique financial planning challenges to address.

Patrick Hicks

Patrick Hicks, @PatrickHicks

Head of Legal, Trust & Will

Imagine that you’re someone who absolutely loves your family and would do anything to support them. You’re often told that you put others above yourself. When it comes to family, that’s the only answer from your perspective. 

Now imagine that you have children and aging parents in your hemisphere. You live harmoniously and without too many challenges. You’re having a great time raising your young children, while your adult children who have left the nest are thriving. Your parents live close by, but are enjoying their retirement and live relatively independently. This is the ideal for most. 

Then, imagine that fate has other plans. The whole world experiences a rough economic downturn that takes years to recover from, just to be hit with a global pandemic next. (Sound familiar?) Now, all of a sudden, your family members are looking to you for support, including your aging parents and adult children. What do you do?

Did this scenario give you the chills? Did it hit too close to home? As it turns out, this is the reality for Americans belonging to what economists call the “Sandwich Generation.” Keep reading to find out the Sandwich Generation meaning, how it’s affecting nearly 10 million Americans today, and what they can do to better protect themselves. 

“Sandwich Generation” Meaning

The “Sandwich Generation” meaning is easy to understand: it describes middle-aged Americans who are “sandwiched” between a younger generation and an older generation.

Almost all of us will enter a time in our lives in which we have generations both above and beneath us. What is significant about today’s Americans that requires a special label?

The “Sandwich Generation” term came about because of the unprecedented pressures facing Americans in their 40s and 50s today. According to the Pew Research Center, a whopping 47 percent of Americans in this age group are providing care for both their parents and their children. 

This statistic is caused by two different phenomena occurring simultaneously. For starters, we have a historically large baby boomer generation that is aging rapidly. They often require financial, emotional, and medical support from their adult children. 

At the same time, a significant proportion of young adults are suffering from the long-lasting effects from the Great Recession and now the COVID-19 pandemic. Some were never able to leave the nest, while others were forced to move back in with their parents due to the pandemic and related financial pressures. Some Americans are supporting their parents, adult children, and minor children. For more information about Millennials and their estate planning habits over the course of the pandemic, click here to read our annual study. 

Here is an example to help illustrate what the life of a Sandwich Generation member might look like.

What is an Example of Sandwich Generation?

John and Susie are a married couple living in Austin, Texas. They are in their mid-to-late 40s, and met when they both worked at a technology company many moons ago. 

Together, they had Molly, Mark, and Mason. Molly, the eldest, is a college graduate who is a few years into her very first job. Mark is a junior at New York University, as he wanted to be close to his sister. Mason, a lovely surprise, is just 6 years old and lives at home with John and Susie.

John earns a solid income as a mid-level executive. Just enough to support the family comfortably and help with Mark’s tuition and board at NYU. Susie left the working world to focus on raising Mason. She also decided to stay at home because John’s father, 78, has developed dementia and requires more support than before. She buys him groceries, cleans his house, and takes him to the local rehabilitation center several times a week. 

When the COVID-19 pandemic hit, John and Susie found themselves supporting a full house. Mark’s university closed and required all students to leave on-campus housing to continue their studies remotely. Molly was beginning to feel fed up with the fast pace of the city and expensive cost of living. Both Molly and Mark asked their parents if they could please move home. Of course, they didn’t say no.

John and Susie find themselves as a part of the Sandwich Generation. All of a sudden, they are faced with supporting three children (two adults, one minor), plus an aging parent. This is all on one modest income. 

By learning about John and Susie’s story, you can begin to imagine some of the challenges faced by many members of the Sandwich Generation.

What Are Some of the Challenges of the Sandwich Generation?

The Sandwich Generation faces several challenges, with the main one being financial planning. They’re often stretching one income to support multiple family members while also trying to pay off debt, save up for emergencies, and saving toward retirement. 

They also face challenges with their physical, emotional, and mental health. Providing a dual caregiving role can be physically demanding. However, it can also easily take a toll on someone’s mental and emotional health. Caregivers often report feeling depressed, guilty, and isolated. They can also encounter marital and parental issues. Stress and anxiety are the key contributors to these feelings. provides some tips on how to bust stress if you are shouldering some of these burdens. 

Financial Planning for the Sandwich Generation

Earlier, we mentioned how one of the key challenges faced by the Sandwich Generation relates to financial planning. As an adult, we can ideally focus on our personal financial goals, which can be hard enough in itself. This could include building up a safety net, paying off those college mortgage loans, and tucking money away for our retirement.

However, life can sometimes have other plans and wreak havoc on our finances. If we find ourselves taking care of both minor and adult children, plus aging parents, we might find it difficult to make ends meet, let alone reaching some lofty financial goals. This means that we could use all the support and education we can get. 

With this, here are some actionable financial planning tips for the Sandwich Generation.

1. Have a conversation with your parents early on about their finances

The first tip should happen long before you find yourself in the sandwich generation dilemma. In other words, this is a preventative action step.

Have an open and honest conversation with your parents about finances as early as possible. It’s in everyone’s interest to make sure your parents can support themselves. This includes talking about any debts, ongoing expenses, estimated income in retirement, and other assets that could potentially help. 

Although it may feel awkward to talk about money, you have a right to know. If you find yourself in a situation where you are providing care for a parent, the burden will fall on you. If they are not prepared financially, part of the burden includes finances. This is also a good time to make sure that they have a proper Estate Plan in place in case anything were to happen. 

2. Keep an open dialogue with children about money

This is also a great time to have transparent communication with your children about finances. Let them know if you are saving up money for their college education, and how much you expect them to contribute to the household when they are legally able to work. 

This can provide them reassurance and an understanding about the family’s financial game plan. Talking about money early on can provide them with great financial skills and healthy spending habits. 

We also provide a guide on estate planning for the modern parent. 

3. Review your budget and make adjustments to spending, saving, and income planning

Thinking about the future can also serve as a wakeup call regarding your spending behavior. If you’re suddenly hit with financial challenges, you’ll likely feel foolish for not creating a better safety net for yourself and your family.

Review your budget and monthly spending and make the necessary changes to help you meet your financial goals. This could include small changes such as making coffee at home, working out at the park instead of at the expensive gym, and eating out less frequently. Small savings can add up significantly over time. 

4. Prioritize long-term saving 

Also, place an emphasis on your long-term savings goals. You’ll feel thankful if your parents can support themselves financially through retirement, and one day you’ll find yourself in the same shoes. It will feel amazing one day when you retire and can fully support yourself, and feel relief that you won’t be placing any burden on your own children.

Every financial advisor will tell you to start saving early, even if you can only save a little at a time. Thanks to the magic of compounding interest, your money will grow while you sleep. If your employer offers any type of matching plan, take advantage of it! Not doing so is like giving away free money that could have boosted your financial standing in a significant way.

5. Establish regular check-ins

A good indicator of financial health is a person who checks under the hood at regular intervals. Although the “set it and forget it” strategy works well for most long-term saving, it’s still important to establish regular check-ins. Every once a while, sit down and analyze your spending habits and recreate your budget. Also, check your investment vehicles and savings products and make any changes if you spot a better investment option or savings rate. 

6. Revisit estate planning for you and your parents

Last but not least, don’t forget to revisit estate planning for yourself and your parents. A solid Estate Plan ensures that assets and property are passed down in your family effectively, efficiently, and rightfully. 

If someone passes away and does not have an Estate Plan in place, it can wreak havoc on your family legacy. Not only will your loved one’s estate plan pass through probate, the court system may distribute assets in a way that doesn’t work for your family.

Make sure every adult in your family secures their assets by putting a strong Estate Plan in place. It’s also a great idea to hold regular family meetings to talk about estate planning to make sure everyone involved is aware of what’s to come and is a part of a cohesive strategy. 

Update Your Estate Plan in Accordance with Sandwich Generation Needs

Belonging to the Sandwich Generation is challenging, and it’s the harsh reality that millions of Americans face today. Even if it doesn’t affect you now, it could affect you later. A large proportion of Americans continue to age, while the economic future for today’s young adults remains uncertain. You may also have a parent, sibling, aunt, or uncle who is facing the challenges of this generation. 

Some economists have even created new categories within the Sandwich Generation as new variations arise. For instance, the Club Sandwich Generation describes young adults who have minor children, elderly parents, and aging grandparents. It can also describe older adults who are wedged between elderly parents, adult children, and possibly even grandchildren. This means that the majority of Americans can find themselves in this predicament.

Taking care of our caregivers’ collective physical, mental and emotional stress is a top priority. Another priority is supporting them with their financial planning. No matter our role in our families or the economy, we can pitch and help by making sure those we love are planning for their financial future. One of the best ways to do this is by establishing an Estate Plan.

Not sure how to support your family in the process of creating an Estate Plan? Looking for more knowledge and education so you can better persuade your loved ones? Trust & Will has got your back! Not only do we provide easy and affordable estate planning products that are all online, we also offer an extensive learning library that covers nearly every estate planning topic you could think of. Get started today!

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