Sandwich Generation faces unique financial challenges

Over the last fifty years, the number of people living in multigenerational households has quadrupled, with many adults sharing their homes with their parents or older relatives, as well as their adult children. Known as the Sandwich Generation, many 40- to 59-year-old adults are finding themselves caring for both older and younger family members while also trying to keep their own financial goals — including retirement — on track. To better understand how the Sandwich Generation is navigating this life stage and what challenges they may be facing, Athene conducted a study that gathered feedback from parents in their 40s and 50s who are supporting adult children and aging family members.

Among the group, there is a divide on whether offering financial support has affected their own retirement readiness. Around 47% of respondents reported that they are putting off retirement to offer financial support to aging extended family or adult children, and nearly the same amount is tapping into their retirement assets to cover these expenses. On the flip side, 45% of the group say that supporting their family has not affected their retirement goals or plans for the future. Maintaining their standard of living and not having enough assets to retire are among the top concerns according to our research study.

What concerns does the Sandwich Generation have for retirement?†*

†Respondents were asked to select all that apply.
*Figures do not add up to 100% due to rounding.

Balancing personal and family finances

For this group of Sandwich Generation parents, 58% of households have adult kids at home, and another 76% of individuals financially support them. Even with a vast majority of their children having a source of income, parents are helping with a variety of expenses. 

• 82% daily expenses (groceries, clothing, cell phone, etc.)
• 65% housing
• 57% insurance (healthcare, vehicle, etc.)
• 53% education
• 44% transportation
• 5% other 

In addition, 50% of this group is also managing all or a portion of their children’s debt. 

Are you financially preparing, or have you prepared for one or more of your adult children to attend college?

The survey also revealed that many people in the Sandwich Generation are balancing career and caretaking responsibilities, adding emotional stress to their list of challenges. While 44% of respondents said the financial strain of caretaking was difficult, 58% said emotional and physical stress was the biggest pain point.

Do you share caretaking and financial support responsibilities for your extended family with sibling(s)?

More income could help boost confidence

Among the respondents, 55% made less than $100,000 per year. For this group, they said they were most concerned about their lack of assets to retire, followed by a worry they would not be able to maintain their standard of living once in retirement. For those who made more than $100,000 per year, 66% of respondents shared this concern of not being able to maintain their lifestyle once retired, but were more confident in their ability to take care of their adult children and aging parents successfully. 

When looking at the responses of men and women in this study, there are significant differences in financial decision making, seeking professional guidance and overall confidence about providing for their older and younger family members. The study found that males are more likely to be the sole decision maker of the household, more likely to work with a financial professional and are most confident in their caretaking ability of adult child(ren) and extended family. Around 29% of women share this confidence, but only a small percentage connect with a financial professional for assistance.

How confident are you in your ability to take care of your adult child(ren) and extended family? 

Male respondents

Female respondents

Managing money of multiple generations

Not only are members of the Sandwich Generation commonly tasked with keeping their own financial plans on course, but they’re often responsible for navigating the money matters of their children and parents. The study revealed that many heads of households are serving as a source of financial literacy for their adult children, including helping them open a bank account, explaining credit and debt and discussing budget management and healthy financial habits. Plus, several adults are also helping their parents plan for health care costs, navigate estate planning and manage their retirement income. 

How are you teaching your adult child(ren) about financial independence?†*

†Respondents were asked to select all that apply.
*Figures do not add up to 100% due to rounding.

In looking ahead to their own retirement, 66% of the surveyed group are counting on Social Security as a source of income, followed by 401(k)s and investments, and nearly a quarter of respondents have annuities as part of their financial portfolio. Close to 50% of respondents reported that supporting family has not affected retirement goals, while 70% of those with annuities (22% of overall sample) say that caring for loved ones has not altered their retirement readiness. 

How has supporting your extended family and/or adult children affected your retirement readiness?*

*Figures do not add up to 100% due to rounding. 

For many who are a part of the Sandwich Generation, they may face a unique challenge of supporting multiple generations while also trying to keep their own goals in mind. This will require a flexible financial plan and empowering their family members to take part in their own financial futures.

Methodology 

Athene surveyed 409 Americans ages 40 to 59 who financially support and have adult child(ren) over 18 and parents or extended family members living in the home to understand their overall financial dynamics and retirement readiness. The poll was conducted from February 21 to March 7, 2023. 

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