If you’re age 40 to 59, and providing monetary support for your parents and children, you’re considered part of The Sandwich Generation. In fact, some in this age group are also caring for grandchildren which puts them in a category nicknamed: The Club Sandwich Generation.
According to a Pew Research survey, 73% of adults in their 40s and 50s, who have at least one child age 18 or older, have provided them with some financial help. Many of them report their adult kids are still in school but a number say they’re providing financial help for other reasons. Additionally, among adults in the same age range, 32% provided financial help to a parent age 65 or older.
The Financial Burden Of A Multigenerational Household
In a 2023 study, Athene.com surveyed 409 Americans age 40 to 59 who financially support their adult child(ren) over 18 and parents (or extended family) living in the same home. Approximately 47% of respondents say they are either putting off their retirement or withdrawing their retirement savings to cover the expenses of their multigenerational household.
Businesswire.com reports a staggering 90% of Sandwich Generation adults have made a lifestyle change or financial decision due to shouldering the added responsibilities. The top financial changes include:
- Cutting back on other expenses (34%)
- Contributing less or nothing to their emergency savings (26%)
- And taking on more debt (26%)
“With so many loved ones depending on you, think about what might happen if you become disabled and need short-term care.”
The Sandwich Generation Needs To Prioritize Their Financial Future
For federal workers, this means increasing contributions to your Thrift Savings Plan (TSP) as much as possible and making sure you’re getting your agency match. You can cut unnecessary household expenses by taking an inventory of everyone’s financial needs and making adjustments. You may find there’s money you can reallocate to your TSP nest egg.
With so many loved ones depending on you, think about what might happen if you become disabled and need short-term care. Remember – the federal government does not offer Short-Term Disability Insurance to help provide you with income. Also talk to your parents about their estate plan and make sure they’ve updated their beneficiary designations.
Far too many Sandwich Generation caregivers wrongly assume retirement planning can be put on a back burner until their kids are out of the house or their parents have passed away. But when you’re providing monetary support to both the younger and older generations, your financial future is even more important. Talk with an FRC® trained advisor who can help you plan your financial future before it’s too late.
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