Key Takeaways

• Supporting aging parents can affect retirement saving, college funding, insurance, debt payments and everyday household spending.

• Care costs can change quickly, so a financial plan should account for what a family is spending today and what higher levels of care could cost later.

• A financial advisor can model parent support, child-related expenses and retirement together and show how changes in one area affect the others.

In 1981, social worker Dorothy A. Miller gave a name to a group she was seeing more often: adults, especially women in their 30s and 40s, caring for dependent children while also helping aging parents. She called them the “sandwich generation” in an article published in Social Work. Her original paper is available through JSTOR.

More than 40 years later, Pew Research Center finds that 54% of Americans in their 40s are now in the sandwich generation. The financial pressure can come from several directions at once: helping a parent with care or housing, supporting children at home or into adulthood, paying down debt and continuing to save for retirement. The question for a financial plan is how much the household can commit to each responsibility as those costs change.

What Does Being in the Sandwich Generation Mean Financially?

Pew Research Center defines adults in the sandwich generation as people who have a living parent age 65 or older and either a minor child or an adult child they supported financially during the previous year. By that measure, 25% of U.S. adults are in the sandwich generation. The share rises to 54% among adults ages 40 to 49 and 45% among those ages 50 to 59.

The financial circumstances within that group vary widely. One family may occasionally pay for a parent’s groceries. Another may contribute every month toward housing or home care. Children may be in elementary school, college or already working but still receiving financial help.

Start by identifying the commitments that already exist.

The amounts, timing and duration of those commitments provide the information needed to assess what the household can afford.

How Much Can Caring for an Aging Parent Cost Over Time?

Caregiving does not always begin with professional care. Family members may start by providing transportation, meals, household help or financial support. Those commitments can grow if a parent needs more help at home, moves to assisted living or eventually requires nursing care.

The financial effect can begin well before paid care. AARP and the National Alliance for Caregiving reported in 2025 that 29% of family caregivers were also supporting children. Their research also found substantial financial effects among caregivers, including reduced saving and additional debt.

Paid care can raise the amounts considerably. CareScout’s 2025 Cost of Care Survey reported a national median of $35 an hour for a non-medical caregiver. Assisted living had a national median cost of $6,200 a month, or $74,400 a year. A private nursing-home room had a national median cost of $129,575 a year. Actual costs depend on location, provider and level of care.

Families considering how those expenses could develop over several years may also want to review Datalign’s guide to preparing for long-term care in retirement. It covers care settings, future costs and the role long-term care can play in retirement planning.

Medicare also has limits that affect how families estimate future expenses. Medicare generally does not pay for long-term custodial care, including ongoing assistance with activities such as bathing, dressing and using the bathroom. Skilled nursing and home health services follow separate coverage and eligibility requirements. Datalign’s guide to preparing for rising health care costs discusses medical expenses, insurance and savings as part of a broader financial plan.

Before deciding how much adult children will contribute, identify the parent’s available resources, including Social Security, pensions, retirement accounts, savings, insurance and any benefits for which the parent qualifies. Then estimate what additional levels of care could require.

A financial plan can include the parent’s current resources, support from family members, local home-care costs, assisted-living or nursing-home costs, insurance or public benefits that may apply, and the amount adult children could contribute. It can then show how those contributions affect their retirement savings, cash reserves and debt.

National figures provide a reference point. Local costs become more useful once a family begins planning for a specific parent, provider or facility.

How Can Parent Support Affect Retirement Planning?

Money contributed toward a parent’s expenses changes the amount available for the household’s other commitments.

A household paying an additional $1,000 a month for a parent could reduce discretionary spending, draw from cash, change college contributions, reduce retirement contributions or combine several sources. Each choice produces a different financial result.

Retirement contributions require particular attention because reducing them affects current saving and may reduce future investment growth. An employee may also receive less from an employer matching program if contributions fall below the amount required for the full match.

A financial advisor can model the alternatives using the household’s income, assets, retirement timeline, existing contributions, taxes and expected family expenses. A temporary six-month expense will affect the plan differently from several years of recurring support.

The household’s starting position also changes the analysis. Someone approaching retirement with limited savings has different constraints from someone with more accumulated assets and a longer time horizon.

How Should College and Child-Related Costs Be Considered?

Support for children can extend across many years and take different forms. A family may be paying current household expenses, contributing to college savings, paying tuition or helping an adult child with housing or other expenses.

Identify each commitment separately. A recurring contribution to a 529 plan creates a different obligation from a tuition bill due next semester or continuing financial support for an adult child.

Datalign’s guide to 529 plans and the broader family financial plan looks specifically at contribution decisions alongside retirement savings, emergency reserves and other family priorities.

Timing also changes the analysis. Some child-related expenses have a known end date. Others may continue for an uncertain period.

A financial advisor can include those commitments in cash-flow and retirement projections and model what happens if the amounts change. That allows the household to evaluate college contributions, parent support and retirement savings using the same income, assets and time horizon.

What Should Sandwich Generation Families Ask a Financial Advisor?

Describe the family’s actual finances rather than asking only whether the advisor works with the “sandwich generation.”

A household might explain that it is contributing to retirement, saving for college and paying some of a parent’s expenses. Ask what information the advisor would gather, how those expenses would enter the financial plan and how the advisor would model an increase in care costs.

Also ask what services are included, how the advisor is compensated, what credentials they hold and how often the financial plan is reviewed. Datalign’s financial advisor evaluation checklist covers additional questions about fees, credentials, conflicts and services.

An advisor can address the financial analysis. Estate documents and powers of attorney may require help from a legal professional. Medicare, Medicaid and other benefit questions may require specialized guidance. Tax decisions may require a tax professional.

The Aligned Perspective

Dorothy Miller wrote about the sandwich generation in 1981. Today, it might look like a parent who needs more help getting around, a college payment due next month, an adult child still receiving some support and a retirement account that has to fund another 30 years.

Families rarely make all of those decisions at once. A parent needs help with one expense, and later needs more. A child stays on the family budget longer than expected. Work changes. Retirement gets closer.

Putting the numbers in one plan makes it possible to see what the household already provides, how much additional support it can afford and what those decisions mean for retirement, investments, insurance, debt and cash over time. A financial advisor can help update that analysis as the family changes.

Datalign connects people with financial advisors based on the financial information they provide, the services they are looking for and the type of advisor relationship they prefer. If caring for parents while supporting children has become part of your financial life, include it when describing what you want help planning for.

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