Who Is the Sandwich Generation? 3 Costs Hit

You pay for a child's daycare on Monday and a parent's prescriptions on Tuesday. That is the sandwich generation: adults caught between two dependents, usually in their prime earning years and with the least slack. The term sounds cute. The arithmetic is not.

How many Americans are in the sandwich generation?

Pew Research Center's 2022 analysis found that about one in four U.S. adults has a parent aged 65 or older and is also raising a child under 18 or supporting an adult child. The group skews toward people in their 40s and 50s, which means Gen X and older millennials.

The caregiving side is large on its own. AARP estimates that more than 50 million Americans act as unpaid family caregivers. Most do the work while holding a job, and many cut hours or leave the workforce to cover it. Lost pay is a cost the surveys rarely price in.

What are the three costs squeezing this group?

Three bills drive most of the pressure: childcare and child-raising, eldercare, and the retirement savings that get skipped to cover both.

Child costs. Raising a child to 18 is commonly estimated near $300,000 or more, and full-time center care often runs $10,000 to $17,000 or more per year, exceeding in-state college tuition in many states (Child Care Aware / Care.com). Our deeper look is in the cost of childcare.

Parent costs. Genworth's Cost of Care surveys put a private nursing home room well above $100,000 a year and a full-time home health aide near $70,000 to $75,000 or more. Medicare generally does not pay for long-term custodial care (Medicare.gov), so families or Medicaid, after assets are spent down, carry it. See the cost of eldercare.

Skipped savings. Money sent to a daycare or a care facility is not going into a 401(k). The Fed's Survey of Consumer Finances already shows median retirement balances far below the $1.1 million to $1.5 million common guidance suggests.

Why is the squeeze getting worse?

Three trends overlap. People are having children later, so many parents hit the peak cost of kids at the same time their own parents hit the peak cost of aging. Americans are living longer, which stretches eldercare. And the pay needed to cover both has not kept up: the federal minimum wage has been $7.25 an hour since 2009 (U.S. Dept. of Labor), and median household income is only about $80,000 (U.S. Census, 2023).

A household earning that amount and paying $15,000 for one child's care has already handed over almost a fifth of its income before rent, food, or a parent's bills.

Who pays the biggest price?

Women do. Pew and AARP caregiving research consistently find that women provide more of the unpaid care, and they are more likely to cut paid hours. Lower-income families feel it hardest because they cannot buy their way out with paid help. A household earning near the median cannot absorb a $100,000 facility bill. It can absorb unpaid care only by giving up work.

Childcare workers also earn very little, which is part of why prices are stuck: costs are high for parents while pay is low for caregivers. We explain that paradox in why childcare is so expensive.

What does it do to retirement?

It delays it. A parent who spends a decade funding care for both generations reaches 60 with a smaller account. This is the same pressure behind the Gen X retirement crisis, and the savings math carries forward to the next cohort in will millennials be able to retire.

Where does the pressure come from?

The pressure is not a family failure. It comes from a system that treats care as a private expense. Many wealthy countries fund childcare or long-term care publicly or through insurance. The United States leaves most of it to households, so the bill lands on whoever happens to be in the middle. For a wider read of the squeeze on younger adults, see Gen Z cost of living and why Gen Z can't get ahead. For the big picture, see the broken American Dream.

The bottom line

The sandwich generation is what happens when two uninsured costs, children and aging parents, meet one paycheck. About a quarter of American adults are in it, and the bills run from $10,000 a year to more than $100,000.

The cause is systemic: care costs are treated as a household problem while wages stay flat and the federal floor stays at $7.25. A fair economy pays enough to cover care and does not make the people in the middle choose between their children and their parents.