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Surprising Financial Facts About the "Sandwich Generation"

Having children comes with familiar -- and even predictable -- sets of problems and obligations. As they grow, you know you'll be navigating your way from diaper changes to homework to curfews to college loans, and eventually (hopefully), to being mostly off the hook as your adult offspring take responsibility for their own lives.

That idealized version gets far more complicated if, at some point along the way, you find yourself also having to care for your own parents.

Members of the "sandwich generation" have both sets of responsibilities. These 40- to 60-year-olds have kids who still depend on them financially, as well as parents or in-laws whom they help in an assortment of ways, to varying degrees.

Most often, those added burdens include assisting our elders with some chores -- 55% of sandwich generation folks are doing that. But almost as common is being called on to manage our parents' finances: 49% have had to accept that task, according to the 2018 State of the American Family study from MassMutual, while 31% say they are financially responsible for the older generation -- in other words, covering a significant fraction of their bills.

The sandwich generation has to care for children and parents or in-laws. Image source: Getty Images.

What's the impact?

While 27% of sandwich generation survey respondents said that caring for two generations at once was adding to their emotional and financial stress, it's worth noting that such families actually have more accumulated wealth on average -- $526,000 vs. $349,000 -- than households that lack those added responsibilities.

"While our research indicates that one-third of families caring for older and younger generations struggle to find the right balance between work life and home life, it's astounding and comforting that these sandwich generation superheroes also report being more confident making financial decisions and being better prepared for an emergency," MassMutual Vice President Tara Reynolds said in an email to The Motley Fool. "Perhaps real-life experience and exposure are the triggers that inspire an increased state of preparedness."

Members of the sandwich generation are more likely to struggle to find a life/work balance (31% vs. 22%) compared to non-sandwich generation families. There's no single solution to that, but 45% said a flexible schedule helps, while 35% get help on household tasks from family members, 30% work from home, and 17% get help from other family members when it comes to child care, according to the MassMutual report.

And even with the stress and the expenses, sandwich generation members are more confident than average that they will achieve the American dream. They believe in greater numbers that they will achieve financial security, retire when they want to, and meet their other financial goals.

"Another surprising and heartwarming finding from our research is that most sandwich generation families see the benefits of being such a family, despite emotional and financial drains," Reynolds added.

Image source: MassMutual.

Maintain a balance

Being the responsible party for two generations at once -- even when your kids are older and more independent, and your parents or in-laws only need a helping hand -- can be draining, both mentally and financially. For caregivers, it's important not to let it overwhelm you, and to make sure that everyone involved is contributing what they can to the smooth operation of your extended family.

Your kids, for example, may still need rides, homework help, and financial support, but they can pitch in around the house. The same is true for able-bodied parents and in-laws. They may need you to keep their finances in order, but they also might be able to help with the laundry or jump in to help manage the kids.

Clearly, being sandwiched between two generations has its stresses and its rewards. However, if there's one unexpected benefit, it may be greater self-awareness. Across the board, people in this situation are more likely to be planning actively for their own future. Seeing firsthand the consequences of not being prepared enough, they have, on average, become more educated about their finances, and more proactive in their approach.

So learn one more lesson from your parents -- or other folks' parents -- and start putting more focus on your long-term financial security. It'll be a nice silver lining to the cloud that is sandwich generation stress -- one that will pay off down the road in your golden years.

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