Your clients have worked hard all their adult years, raising children and changing careers with the times, while aiming toward a great retirement.

But perhaps a family elder is increasingly in need of assistance, financially and otherwise, because she’s nearly outlived her retirement nest egg. And so, your clients invited her to live with them. Meanwhile, they have one child in college and another adult child who moved back home because of a tight job market.

What should have been your clients’ gentle coast toward retirement is instead more responsibilities from all sides. They have joined “the sandwich generation.”

The numbers

According the Pew Research: Social and Demographic Trends, about one in seven middle-age adults are financially supporting both an aging adult and a child. ( Pew goes on to say that the numbers of sandwich generation members has remained fairly constant in recent years — but the financial burden has increased. And that pressure, Pew says, is coming not from aging parents but from grown children instead.

The AARP reports there are 66 million Americans caring for children, spouses and parents. The typical sandwich generation member is a 48-year-old woman with a paying job. She also spends about 20 hours a week providing care for a parent. (

The risks

Caring for adult children and aging parents obviously presents financial problems for your sandwich generation clients. According to a Sallie Mae study, two-thirds of sandwich generation members say they would dip into their retirement savings to pay for a child’s education. ( Footing the bill for an education that might not pay off in the short term obviously is a risk because the job market for recent graduates is as poor as it’s been in a generation.

In addition, older adults have seen nest eggs shrink. And so, your sandwich generation clients might be supporting three sides of their family for years to come.

As advisors, we can help clients look at the situation with a clear eye and steer them in a safe direction. The key to avoiding financial ruin is careful, strategic planning.

  • • Save, save, save. Put away as much money as possible and pay off debts aggressively.
  • • Engage the next generation. Your clients’ children should be taking charge of their financial situations, whether through part-time jobs or taking out college loans.
  • • Give a gift. Instead of paying off a child’s debts, clients can give them a lump sum to budget and empower them to cut nonessentials and stop living paycheck to paycheck.

The rewards

Despite the challenges of supporting two extra generations — especially grown children — sandwich generation members routinely report that they have stronger emotional ties with their children. Many find the rewards outweigh the risks. According to Pew Research, sandwich generation members are just as happy with their situation as those who aren’t “burdened,” with 31 percent say they are very happy with their lives.

We hope this information was useful to you and helps your clients. If you have a specific case or a question, don’t hesitate to call our office.

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