Britannica, the English-language encyclopedia that has roots as far back as the 1760s, recently highlighted a phrase familiar to the reverse mortgage industry — the “sandwich generation” — in recognition of the growing importance that caregiving for older relatives will have as the global population grows older.
Highlighted on Britannica Money, an online portal designed to expand knowledge for everyday investors and savers, the term was explained to recognize the growing role that such people play in simultaneously caring for older and younger loved ones.
“If your kids — including adult children — still need you at the same time your aging parents need support, you’re likely part of the sandwich generation,” the entry reads. “Many adults, particularly those in their 40s, 50s, and 60s, find themselves giving time, mental and physical energy, and often financial resources to support the generations above and below them, leaving themselves sandwiched in the middle.”
The entry includes information on how older loved ones may choose to navigate financial challenges in later life, including through the deployment of their home equity. Since there are seniors who may need financial support from their children to make ends meet, considering a personal budget from all angles is important.
“You must consider your own budget and retirement savings as you spend money to help your parents,” the entry said. “Before you dip into your own savings, make sure you’ve explored all aid options, including Medicare, private insurance policies, and their assets. If your parents have equity in a home, they might consider tapping into it via a home equity line of credit or a reverse mortgage.”
A survey published last year by Realtor.com found that members of the sandwich generation were split on whether serving in a dual-caregiver role helped or hindered their own ability to buy a home.
Some aging advocates also say that older Americans have the potential to become their adult children’s biggest expense in the coming years. And a 2023 survey by CNBC found that 56% of Americans feel they are not on track to retire comfortably.
This lack of assurance in their own retirement security means that younger generations are often unprepared to assume any position of support for their parents, according to Sarita Mohanty, president and CEO of elder financial advocacy organization The SCAN Foundation.
“Something has to give,” Mohanty said. “If you’re in the sandwich generation – Gen X and older millennials – and want to share in the responsibility for their parents’ retirement, you should begin by thinking of your parents’ retirement plans in the context of your own.”
A story late last year in the Boston Globe suggested that Gen X homebuyers should focus on fashioning homes for aging in place. This could benefit both themselves as well as any older family members that may be living with them.
