Financial planning for one is daunting, but for the millions of Americans in the 'sandwich generation'-those simultaneously caring for children and aging parents-it's overwhelming. Without a strategy, many risk financial, emotional, and physical exhaustion.

A 2024 Athene survey found nearly 75% of respondents aged 40-59 had adjusted their retirement goals to support adult children and elderly relatives. Some reduced expenses, delayed retirement, or dipped into savings. Others plan never to retire.

'It's a very challenging environment,' said CPA Miklos Ringbauer. Without a plan, 'you hurt yourself, your own future, and your own wealth.'

Long-Term Care: The Core Challenge

About 70% of people turning 65 will need long-term care, according to HHS. But traditional health insurance and Medicare don't cover it, and costs are steep: $24,700 annually for adult daycare, $80,080 for home caregivers, and over $114,000 for a nursing home.

Strategies for the Wealthy

The affluent can self-fund or buy long-term care insurance, though premiums can rise. A hybrid life insurance policy offers a fixed-cost solution, paying out either as care benefits or a death benefit. 'No money is left on the table if you never need care,' said advisor Rob Burnette.

Leveraging Public Benefits

'One of the biggest mistakes is not taking advantage of public benefits a parent may be eligible for,' said elder law attorney Joseph Fresard. Veterans may qualify for care; others can use Medicaid, but must navigate its five-year look-back rule. Families can legally spend down assets or use irrevocable trusts.

Crisis Planning: No Plan Yet?

If a parent needs care unexpectedly, 'don't panic,' Ringbauer said. 'Stabilize your own finances first.' Contribute at least enough to a 401(k) to get the company match.

Workplace benefits can be a lifeline. Morgan Stanley's Kate Winget noted that flexible work arrangements, leave policies, and financial wellness tools are often overlooked.

Pay for care tax-efficiently using dependent care FSAs, HSAs, and credits like the Child and Dependent Care Credit. Keep meticulous records.

Key tax credits include:

  • Child and Dependent Care Credit
  • Earned Income Tax Credit
  • Credit for Other Dependents
  • Itemized deductions for medical expenses
  • American Opportunity Tax Credit