Financial Planning Challenges and Strategies for the Sandwich Generation

Almost half of all adults are part of the “sandwich generation.” These are adults in their 40s and 50s who are helping support or care for a parent while also supporting or caring for a child.1

Being caught between two generations of loved ones who require care can be both financially and emotionally draining, but there are ways to reduce the pressure. Here are three financial planning challenges the sandwich generation is likely to face—and some strategies to address them.

Challenge: Having to provide daily care for a parent while working full-time.

Strategy: Research care options and alternatives.

There is often a lot of gray area between needing some help with daily activities and requiring round-the-clock care. If you find yourself visiting your parent one or more times each day to provide assistance, it is worth looking into home care options that can relieve some of this burden. From aides to home health nurses to companions, there are many providers who may be able to share some of the responsibilities you are shouldering.

What’s more, these services are often available at low or no cost if your parent has Medicare, Medicaid, or VA insurance.

Challenge: Saving for retirement while having to step back from work to care for a parent.

Strategy: Meet with a financial professional.

Many members of the sandwich generation find themselves dropping out of the workforce so that they no longer have to schedule their caregiving duties around a full-time job. Unfortunately, this can sometimes come at the expense of their own retirement funds. By meeting with a financial professional, they can work with you to help develop financial goals, make any investment changes you need to, and begin to plan your retirement budget.

Challenge: Having adult children “boomerang” back into the nest.

Strategy: Maintain clear communication and expectations.

More young adults than ever are living with their parents. And while some parents are happy to have their children back in the nest (if they ever left), others are ready to be on their own. Having multiple adults sharing the same household can often lead to tension, especially if the adult children are not financially contributing to bills or doing their part to clean and care for the house.

The easiest way to avoid resentment is to make expectations clear at the outset and maintain clear lines of communication. Some parents may expect their children to pay rent or make some other financial contributions to the household; others may urge their children to save as much money as possible so that they can move out. Whatever the goals and expectations are, ensuring that everyone is on the same page when it comes to your financial support can go a long way toward avoiding conflict.

Though it can be stressful to be part of the sandwich generation, there are ways to manage this stress and maintain strong relationships with your parents and your children. With some careful planning, you should be able to manage the needs of all three generations.


Important Disclosures

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by WriterAccess.

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1  Family Caregiving Challenges for the Sandwich Generation, The Arbors,