Demos of sandwich generation shift, though (long-term) financial challenges remain

A new survey shows marked changes in the makeup of the sandwich generation – 30- to 40-year-olds who care for both children and aging loved ones – as significantly more millennials and males now are part of the demographic compared to three years ago.

Those developments were among the findings of a special edition of New York Life’s Wealth Watch survey released in November. The survey showed that 55% of caregivers in the Sandwich generation are male compared to just 36% in 2020. In addition, 66% of caregivers responding to the survey are millennials versus just 39% in 2020. Meanwhile, Gen Xers who identified as caregivers dropped from 40% to 23% during those three years. Among the other notable shifts the survey revealed, approximately 25% of Sandwich generation adults are Hispanic – up from 15% in 2020.

“Our data show the demographic balance of the sandwich generation has shifted, as our population ages and more millennials step into caregiving roles,” said Suzanne Schmitt, head of financial wellness at New York Life. “As a society, we’ll need to consider how this is impacting our financial strategies and take action, especially as other challenges like student debt and inflation continue to impact not only how people spend, save and work toward larger financial goals, but also their overall well-being.”

The financial difficulties that accompany caregiving often are severe, according to the survey. Approximately 45% of the Sandwich generation provides financial support to an aging relative, while also supporting children – sometimes including adult children (48% of the demographic cares for a child over 18) or grandchildren (48% care for a grandchild). Over half (51%) of the Sandwich generation report they’ve made a sacrifice to their own financial security to provide care and nearly half (45%) report having credit card debt, according to the survey.

As a result, 47% of sandwich generation adults said that their household has been unable to meet essential expenses because of caregiving costs in the past 12 months, and 90% said they have made a lifestyle change or financial decision because of their caregiving responsibilities. For instance, 34% said they have cut back on other expenses, 26% said they have contributed less or nothing to their emergency savings, and 36% said they have taken on more debt. On top of that, 40% of the Sandwich generation say they made a financial decision they regret due to mental strain from caregiving.

Women caregivers particularly feel concerned about their financial futures. Only 54% of women said they would be able to provide the same level of care for their loved ones for at least another year before adjusting their financial plan compared to 72% of men.

“Many Americans are not financially prepared for caregiving, which strains all areas of well-being and makes what can be a tough situation even tougher,” Schmitt said. “While the financial burden of caregiving could undermine any household’s financial security and confidence, the lifestyle impacts can be even harder to manage. If half of your time each week is going to caregiving, how are you able to prepare healthy meals, schedule appointments, proactively manage investments, maintain personal relationships, get enough sleep, feel focused and productive at work, and plan for a secure financial future?”

For financial planning professionals and plan sponsors, the survey not only provides insights into the current challenges for those in the sandwich generation – it also offers a window into how the caregiving experience is affecting their plans. The survey shows that 75% of those in the Sandwich generation say that caring for an aging relative has led them to purchase or explore purchasing financial protection products. In addition, 42% said they are considering options to prepare for their own long-term care needs, while 83% said they are weighing buying additional financial protection products, such as life insurance, long-term care insurance and income protection insurance.

“As the Sandwich generation skews younger, there’s an opportunity for millennials to get a head start on building a strong long-term financial strategy, as the earlier people plan for their financial futures, the better. We are encouraged to see that becoming a caregiver has prompted many members of this generation to consider their own future long-term care needs,” said Jeff Beligotti, vice president, head of long-term care solutions at New York Life. “Millennials are finding themselves sandwiched between responsibilities like caring for aging parents and milestones in their own life journeys, like starting their own families, purchasing a home and saving for retirement.

Related: Nothing saved? Gen Xers are facing a ‘nightmare’ retirement scenario unless …

“A trusted financial professional can help this generation navigate competing financial priorities and guide them towards considering tailored, protection-oriented solutions to safeguard themselves and loved ones now while strategizing for a prosperous financial future of their own.”