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Unpacking the Finances of the Sandwich Generation: Key Takeaways from BPC’s Survey of Family Caregivers

The Brief

BPC, in conjunction with Morning Consult, conducted a poll of 2,200 adults, including 435 current or recent caregivers, to understand the impact providing care to aging parents or relatives has on caregivers’ lifestyle and finances.

Today, family caregivers are the single largest source of care for older adults. Each year about 40 million American adults provide critical support to aging parents or family members with a chronic, disabling, or otherwise serious health condition. In 2013, AARP estimated that their unpaid contributions had an estimated economic value of $470 billion, exceeding that of total Medicaid spending ($449 billion).

Increasingly, these caregivers are joining the so-called “Sandwich Generation,” or individuals financially supporting both an older adult and a child. Nearly half (47 percent) of middle-aged adults have a parent age 65 or older and have a minor child at home or are financially supporting an adult child. About one in seven (15 percent) is providing financial support to both an aging parent and child. Younger generations are also increasingly faced with caregiving responsibilities. Today, more than 10 million millennials are family caregivers, while every year 1.2 million millennial women give birth for the first time.

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Balancing work and life are a critical aspect of managing the challenges of the Sandwich Generation

To better understand the impact that providing care to aging parents or relatives has on caregivers’ lifestyle and finances, BPC, in conjunction with Morning Consult, conducted a poll of 2,200 adults, including 435 current or recent caregivers. We found that Sandwich Generation caregivers face unique challenges as they care for multiple generations.

The vast majority of family caregivers face financial pressure associated with caregiving

In addition to helping older adults with basic functional, household, and medical tasks, three-quarters (78 percent) of family caregivers incur out-of-pocket costs as a result of caregiving. On average, family caregivers spend nearly 20 percent of their income on these activities.

BPC’s survey confirmed findings from other reports that many family caregivers face significant financial challenges. Overall, 41 percent of current caregivers in our survey were pessimistic about their financial future, compared to 32 percent of the public overall. This is not surprising given that important parts of a caregiver’s financial wellbeing can be affected by caregiving expenses. As shown in figure 1 below, the types of financial changes family caregivers face range significantly, from relatively simple changes such as reducing non-essential spending (68 percent) to major changes like refinancing their home (13 percent).

Figure 1: Family Caregivers Use Many Strategies to Afford Caregiving Expenses

Sandwich Generation caregivers are more likely to make changes to their work lives to accommodate caregiving

While all family caregivers face pressure on their work lives, Sandwich Generation respondents were more likely to report making work-related changes to accommodate caregiving. In some cases, this meant increasing hours worked to afford caregiving expenses. Relative to those not supporting children over the age of 18, caregivers financially supporting an adult child were more likely to acquire a second job (31 percent versus 12 percent). Caregivers with children at home were more likely than other caregivers to acquire a job when they had not previously been employed (32 percent versus 12 percent). Both types of Sandwich Generation caregivers were more likely to work overtime than caregivers overall.

Second, family caregivers were also more likely than caregivers overall to modify their work arrangements to have more time for caregiving, though different types of Sandwich Generation members approached those changes differently. Caregivers with children at home were more likely than those without children at home to change jobs to have more flexible work hours (33 percent versus 18 percent). Caregivers financially supporting adult children were more likely than those not supporting adult children to reduce work hours overall (48 percent versus 32 percent).

Figure 2: Sandwich Generation Caregivers Face Work Life Changes More Often Than Other Caregivers

Family caregivers with children at home are more likely to make certain lifestyle changes to care for their aging parent or relative

While all family caregivers face financial strain, BPC’s survey found that certain members of the Sandwich Generation are more likely to make certain lifestyle changes to accommodate caregiving. Caregivers with minor children at home are more likely than caregivers without children at home to reduce spending on non-essential activities (72 percent versus 57 percent), move closer to an aging parent or relative (53 percent versus 28 percent) or delay major life decisions, such as having a child or getting married (62 percent versus 46 percent).

Figure 3: Lifestyle Style Changes Among Sandwich Generation Caregivers with Minor Children at Home

What does this mean for paid family leave policy?

As roughly 10,000 baby boomers turn 65 each day, the amount of caregiving needs in America will only grow. Additionally, the number of caregivers in the Sandwich Generation will continue to rise as life expectancies and the average childbearing age simultaneously increase. BPC’s survey findings show that balancing work and life are a critical aspect of managing the challenges of the Sandwich Generation. BPC has worked to aid family caregivers through the financing and delivery of long-term care. Additionally, paid family leave specifically allows family caregivers, and particularly Sandwich Generation caregivers, to afford taking time off to achieve that work life balance. As always, the benefits of any federal policy to increase access to paid family leave will need to be balanced with the potential costs of such a program and the needs of the businesses affected by any policy change.

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