The Unique Challenges Faced by the “Sandwich” Generation

Transcript of Podcast Episode 262

Hello this is Bill Rainaldi, with another edition of Security Mutual’s SML Planning Minute. In today’s episode: the unique challenges faced by the “Sandwich Generation”.

Believe it or not, over the last fifty years, the number of people living in  households with more than one generation has quadrupled[1]. And even more startling, many adults are now sharing their homes with both their parents and their adult children.[1] These people, often between the ages of 40 and 59, are now referred to as part of the “Sandwich Generation,” that is, people helping to care for, or financially support, both an older and a younger generation.

A surprising number of people are caught in the middle of the “sandwich”. According to a September, 2023 study by HireAHelper, a prominent blog designed to help people relocate efficiently and affordably, 26 percent of American adults, or 67.8 million people, are part of the Sandwich Generation.[2]

The study surveyed 1,000 Americans who are part of this special class. Nearly half—46 percent—said that their financial situation was getting worse. In addition, 61 percent said they were anxious about the future.[2]

And that wasn’t the only piece of bad news. One third of the people in the Sandwich Generation said that their extra expenses caused them to reduce their retirement savings, either by contributing less to their retirement accounts or by delaying their retirement date.[2]

And it’s not just a financial issue. The report by HireAHelper provided some other sobering statistics. About 41 percent of respondents said being sandwiched  hurt their mental health, 28 percent said it damaged their social life, and 23 percent said it damaged their performance at work.[2]

The report suggests some theories as to why the numbers are so high. Among them:

1. Older Americans now have a longer life expectancy than previous generations, which leads to a longer retirement, and perhaps a bigger need for financial support as they get older.
2. More people are having children later in life than in previous generations.
3. The cost of living has gone up, so as it continues to rise, more adult children are still living with their parents or relying on them for financial assistance.

There’s no easy solution to all the issues this creates. One good starting point may be to start an open dialog about the family’s finances. It could help give everyone a better idea of where they stand and what the limitations are. And who knows, you might find that you have more savings than you realized.

But this may also be one case where a bit of selfishness might do some good. If you hurt your own retirement prospects by taking care of others, you may end up sending the next generation into the same predicament in the future.

[1] Athene Holding Ltd. “Sandwich Generation faces unique financial challenges.” athene.com https://www.athene.com/smart-strategies/finances/sandwich-generation-faces-unique-financial-challenges.html (Accessed October 25, 2023)

[2] Kupriyanov, Volodymyr. “2023 Study: Insights Into the 26% of Americans in the Sandwich Generation.” hireahelper.com.  https://blog.hireahelper.com/2023-study-insights-into-americans-in-the-sandwich-generation/  (Accessed October 25, 2023)

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