Simultaneously raising your children and caring for your aging parents isn't easy. The pandemic has made it tougher.
Known as the "sandwich generation," Americans supporting kids and parents as well as themselves are facing skyrocketing costs and a hit to their savings, a new report from New York Life found.
More than half, 54%, of those surveyed said they were spending more each month on caregiving since the start of the crisis, with 23% reporting an extra $200 or more per month.
"Higher costs have equated to cuts elsewhere: Sandwich generation members report contributing less to their savings and to retirement, raiding emergency funds, paying off less debt and delaying paying bills," said Dylan Huang, senior vice president and head of retail annuities, investment solutions and wealth planning for New York Life.
More from Invest in You:
Blended families already had unique financial issues — then the pandemic hit
Expecting a baby? Make these financial moves now
How to navigate uncomfortable money matters with your family
On average, they are spending about $1,000 a month to care for an aging relative. Almost 70% are using money from their daily budgets to pay for it, 40% are contributing less to their savings and 30% are saving less for retirement, the report found.
There has also been a shift in the demographics, accelerated by the pandemic. Covid-19 played a major role in the decisions to begin providing care for an aging relative for 26% of respondents. Half of those surveyed, 52%, said the pandemic played some role.
As a result, the sandwich generation has become younger, more female and more diverse, the paper found.
Forty percent of millennials were more likely to be caring for an aging parent during Covid-19 than pre-pandemic, compared to 34% of Gen Xers and 13% of baby boomers. New York Life defined millennials as being born between 1981 and 1996, Gen Xers as 1965 to 1980 and baby boomers as 1946 to 1964.
"It's critical for the millennials of the sandwich generation to establish a financial strategy that can balance 'right now' with 'down the road,'" Huang said.
For Gen X members, checking in on retirement planning is crucial because they have less time to catch up and may need to delay retirement, he said.
It's also important to take into account long-term care insurance, powers of attorney and medical directives, added certified financial planner Tyler Huck, a financial advisor for Atlanta-based oXYGen Financial.
If you or your family didn't save money for long-term care, you my consider buying LTC insurance. While traditional policies are expensive, there are life insurance plans that also provide long-term care coverage.
"Setting this up for your parents or even yourself to prevent your children from being in the same boat is smart," he said.
Meanwhile, a durable power of attorney provides you, as your parents' caretaker, the legal authority to make decisions for them if and when they become incapacitated, and a health-care power of attorney allows you to handle their medical decisions.
Your parents can express their wishes for medical treatments in a living will, also called an advanced directive,
"These items are essential pieces to a financial plan," Huck said.
In the end, it's about trying to find a balance between your caregiving responsibilities and your retirement goals.
"By ensuring your own financial future … you are able to better care for yourself and your loved ones and are incorporating all the vital elements of a protection-first financial strategy," Huang said.
SIGN UP: Money 101 is an 8-week learning course to financial freedom, delivered weekly to your inbox.
Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.