Millennials Are The New Sandwich Generation. Here’s What That Means for Your Wallet.

See if this sounds familiar: Half of your non-working time is spent supporting your parents; the other half, your kids. In the middle there’s you, pressed — and stressed — between their competing needs. Congratulations. Along with nearly 40% of millennials, you’ve joined the current “sandwich generation.” The term refers to the demographic of adults who have both young children and aging parents or relatives to support. In part because millennials are having children later in life than previous generations. In 2019, the median age of women giving birth was 30, compared to 27 in 1990 — more of them still have young children when their parents get old enough to need care as well. 

We typically talk about the sandwich generation in terms of the amount of caregiving involved, and the stress and exhaustion that come with it. But it also gets expensive. The total cost of raising a child from birth to 18 years recently reached $300,000, and caring for an aging family member costs an extra $1,000 per month, on average. This combined financial burden increasingly falls to women, who were also the breadwinners in 30% of households in 2020. According to theSkimm’s 2023 State of Women study, conducted by The Harris Poll, 60% of millennial women worry about financially supporting extended family members as the economy struggles, and 54% fear having to step back from their careers due to caregiving responsibilities. 

It is possible, though, to support a family without sacrificing your own financial future.  

How being sandwiched disproportionately impacts women’s finances

Women make up around 60% of the sandwich generation (across millennials, baby boomers, and Gen Xers), and the caregiving labor often falls to women, says Vicki Shabo, a Senior Fellow for Paid Leave Policy and Strategy, Better Life Lab at New America, a D.C.-based public policy think tank. They spend two to three hours outside of work caring for parents and children daily. That’s 45 more minutes than men, according to data from the Pew Research Center. 

The more caregiver labor women take on, the more likely they are to step back from their careers or leave entirely, which can have a steep financial toll. “If you've got a set of siblings [of different genders], for example, or a household where there's two opposite-sex earners, a woman's earnings are likely to be lower, which means that it's more cost effective for her to either leave work or scale back or take time off,” says Shabo. That could have “a long term impact in terms of retirement savings,” says Jen Hemphill, Accredited Financial Counselor and host of the “Her Dinero Matters” podcast.

The caregiving labor imbalance disproportionately affects BIPOC women, “particularly Black women, who are more likely to be in the workforce and more likely to have multigenerational caregiving responsibilities. Latinas are particularly unlikely to have access to paid leave. So when they are providing care, they may not have access to time off, so they might be more likely to leave the workforce,” says Shabo. 

Stepping back from work has worse financial implications for women of color, thanks to the racial pay gap. Here’s a refresher: For every dollar a man earns, Black women earn 64 cents, Latina and Hispanic women earn 54 cents, and Native Hawaiian and Pacific Islander women earn 80 cents. “It takes longer for them to accumulate that wealth and retirement [money] already,” says Hemphill.  

How to protect yourself financially before you join the sandwich generation

If you’re anticipating joining the sandwich generation down the line, there are steps you can take now to reduce the financial toll:

Talk with your parents and family members.

That includes siblings, aunts, uncles, and anyone else you could be responsible for later — about future caregiving plans, including how to pay for it. Discuss things like life insurance, long-term care insurance, and other estate planning. It might be awkward, but it beats waiting until the worst happens and figuring out the details on the fly. 

Build up an emergency fund and sinking fund. 

Experts say to set aside at least three to six months’ worth of expenses (for you and your dependents). For caregiving savings goals you can anticipate ahead of time, start putting money away in a sinking fund.

Prioritize your retirement.

Meaning: Make your 401k or IRA the largest share of what you can put aside. 

Negotiate a higher salary.

That applies to your current job or a new one. 

How to protect yourself financially if you’re already sandwiched

Ask for help and assess the care needs. 

Then figure out who can share the load with you, says Shabo. Not everyone’s roles have to look the same. Example: One person can be responsible for doctor’s appointments, and someone else can help provide meals at home. 

Call out gender biases. 

If gender norms are impacting the way the care work is being distributed, call it out, she says. 

Talk to your boss. 

There may be resources at work that can help lighten your load, like flexible hours, WFH options, and family leave. Have that conversation as soon as possible so you know your options.

Open a special FSA account. 

Stash away pre-tax dollars for dependent care. You can use it to pay for things like daycare (for kids or seniors), a nanny, and after-school programs.

Try not to be hard on yourself.

“It's important for people to know, A, that they're not alone, and B, that they haven't failed. It's that we don't have systems and support in place, or a culture that is in place to support people who are in that situation," says Shabo.

To access our complete State of Women Report, please click here.