Navigating Now: How Gen Xers Can Survive The Surge In Costs Of Aging Parent Care And Child Care

Katey Davern, a 46-year-old in St. Paul, Minnesota, has learned firsthand just how much paperwork is involved when planning someone’s last years.

Davern, along with her three siblings, started planning for their elderly parents’ end-of-life needs about three years ago. As the parent of five children herself — three of whom are under 18 and still live at home — Davern is increasingly navigating two different financial worlds. In one, she’s helping her parents with end-of-life financial planning. In the other, she and her husband are managing their own immediate family’s spending, saving for their children’s college, contributing to their retirement accounts and adding to their health savings accounts (HSA).

“I think the weird part about being Gen X is while you are raising your kids and they’re becoming less dependent on you, you start to kind of raise your parents. But they don’t want to be dependent on you. It’s a really tricky situation,” Davern says.

Most Gen Xers’ parents either already need end-of-life care or are at the age where they’ll need to make plans for future care. As a result, many Gen Xers themselves (ages 45-60) are in the rare position of having two financial priorities: serving as caretakers for their parents, who could need extensive and time-consuming care, while also sometimes raising kids under the age of 18, who could need child care, school expenses and a college fund. These costs have only grown more expensive over the last few years because of inflation.

The combination of multiple, high-cost financial priorities can have negative effects on Gen Xers’ finances, including their ability to budget and save. And whether they’re caregivers or not, Bankrate data shows that many Gen Xers already struggle to meet important financial milestones, like building a sufficient emergency fund or saving enough to retire. Overall, 84 percent of Gen Xers say they are not completely financially secure, a higher percentage than any other generation, according to Bankrate’s Financial Freedom Survey.

“Generation Xers are the classic group that many of us call the ‘sandwich generation,’” says Bankrate U.S. Economic Reporter Sarah Foster, who reports on economic policy and its effect on American households. “They’re wedged in the middle between conflicting financial goals, like caring for their parents and raising their children. They may feel economic turning points more severely.”

Rising prices, limited resources are squeezing caregivers — especially Gen Xers

Twenty-nine percent of family caregivers of any age have children or grandchildren under the age of 18 living at home while also caring for an adult family member or friend, according to AARP.

Caring for aging parents is expensive, and those costs often fall on caregivers. Caregivers spend 26 percent of their personal income on caregiving expenses on average, according to AARP, and the average family caregiver spends roughly $7,200 per year on out-of-pocket caregiving expenses. Caregivers might also take on other indirect expenses, like additional transportation costs to take their parents to the doctor.

Even if Gen X caregivers were to help their parents as frugally as possible — such as going without hired help and keeping their parents at home — several economic factors make elder care more expensive today.

For one, costs of caring for the elderly at home are actually rising faster than costs of nursing homes or other inpatient care. The inflation rate for the care of ill and elderly people at home has risen 5.6 percent year-over-year, according to data from the U.S. Bureau of Labor Statistics (BLS), while nursing homes and adult day services have risen 4.7 percent. The cost of caring for the elderly at home has grown more than twice the overall inflation rate for all consumer goods (2.7 percent).

Additionally, new restrictions to Medicare passed in the Trump administration’s One Big Beautiful Bill Act will reduce — or eliminate — access to health care for many elderly Americans. The bill blocks improvements to Medicare Savings Programs, blocks nursing home staffing standards and limits Medicare’s ability to negotiate drug prices for some rare medical conditions, among other changes. Without widely available access to care, many low-income elderly Americans may need to rely on their Gen X children even more, including paying for their increasingly expensive medications or helping them find health care providers.

In addition to the cost of caring for their parents, Gen X caregivers have to consider the rising costs of raising their own kids. The average cost of day care and preschool rose 5.7 percent between July 2024 and July 2025, according to the BLS. Infant care for one child alone already costs at least 10 percent of a family’s yearly income in most states, according to Bankrate’s Child Care Costs by State Study.

Once their kids are in school, parents still aren’t financially relieved — the average cost of elementary and high school tuition and fees rose 3.1 percent year-over-year as of July, according to the BLS. That’s before the cost of school supplies, extracurricular activities, saving for college and other necessary children’s expenses.

As Gen X caregivers tackle the dual costs of caring for parents and their own children, many Gen Xers’ finances are lagging behind. More than two-thirds (68 percent) of Gen X workers feel behind on where they should be on their retirement savings, according to Bankrate’s 2024 Retirement Savings Survey, even though the oldest Gen Xers are only a few years away from retirement — or are already retired. Additionally, 69 percent of Gen Xers feel uncomfortable with their level of emergency savings, according to Bankrate’s Emergency Savings Report.

With the majority of Gen Xers feeling behind on their retirement and emergency savings, some, especially low-income Gen Xers, may have trouble paying their bills when they hit retirement age themselves. The effects of these struggles go beyond the figures in their bank accounts: Gen Xers are also the likeliest generation to say money negatively impacts their mental health, according to Bankrate’s Money and Mental Health Survey.

‘Navigating Now’: 4 tips for Gen Xers who have competing financial priorities

Managing one household’s finances can be a challenge. Managing two households’ finances can be an even bigger challenge. If your parents are aging, and you’re raising kids of your own, the best way you can financially care for your entire family is to plan proactively.

1. Prioritize your own financial needs

Although you may have many financial priorities, it’s still important to take care of your own financial needs first.

“Airline attendants like to say, ‘Put your oxygen mask on before assisting others.’ The same is often true for financial advice,” Foster says. “You cannot be in a position to help others if you’re not on solid financial footing yourself.”

Foster recommends that people prioritize their own retirement account and emergency fund before contributing financially to others. Identify what you want to save for — such as an emergency savings fund, retirement account or large purchase, such as a down payment on a home — and make sure your budget includes monthly contributions to those buckets, as well as room to pay off high-interest debt. After, you can use the remaining funds to determine how much financial assistance you can provide to an elderly relative.

“Be open and honest with your children, siblings and parents about how much you can afford to help,” Foster says. “With your children, that might be an opportunity to teach them about financial independence and planning — lessons that can pay dividends in their own lives.”

2. Develop a financial organization system

If you’re managing your parents’ finances and your own kids’, you’ll have to keep track of a lot of information, such as budgets, bank accounts, goals and to-do lists. You should start keeping that information in one place, so you can track of all those moving parts and won’t need to scramble to find important information in an emergency. You can use a pen and notebook to do that, but if you need a bit of digital assistance, you can also use a note-taking app, such as Notion, Evernote, Google Keep or Apple Notes.

Consider keeping track of:

• Important dates, like when bills are due or when a subscription is set to expire
• Your own budget and your parents’, if you’re managing their finances
• Your financial goals, like savings goals or investment goals
• Your debt payoff and savings goal progress
• Future purchases, like gifts or large expenses
• Scanned invoices, receipts and other miscellaneous documents
• To-do lists, especially if you take care of daily tasks for your parents and kids
• Emergency contacts

If you don’t already, you should also make sure you’re keeping your important financial documents — like vital records, deeds, titles and other hard copies of documents — together in an easily accessible place.

3. Set up necessary accounts for you and your children

If you don’t have them already, consider opening savings accounts to allow your emergency savings, retirement savings and college education savings to grow. To set yourself and your family up for future success, you can prioritize contributing to any or all of the following accounts:

• An emergency savings fund with three to six months of expenses (or more, depending on your financial situation) saved for emergencies, like a sudden medical bill or job loss. A high-yield savings account is a great option for emergency savings funds because they typically offer higher interest rates than traditional savings accounts.
• Retirement accounts, such as a 401(k) (if your employer offers one) and/or Roth IRA. Make sure to contribute enough to a 401(k) to receive your employer match, if you have one.
• A health savings account (HSA), a tax-advantaged account that can pay for medical expenses now or in the future. Contributions are tax-deductible if you contribute by paycheck deduction, and earnings and withdrawals are tax-free if used for qualified healthcare expenses. Funds carry over from year to year.
• A 529 account, another tax-advantaged savings account that can pay for your children’s education expenses, like tuition, fees, room and board.

“If uncertainty about college costs and the future of the job market have you nervous about locking up your funds for a specific purpose, even just contributing a few dollars every month into a low-cost index fund may go a long way in growing wealth for your child over time,” Foster says.

4. Consider investing in long-term care insurance

Long-term care for the elderly is expensive, and not everyone has sufficient savings to pay for it themselves. If you’re concerned about your parents’ future access to assisted living or home care, you might want to consider taking out a long-term care (LTC) insurance policy for them. LTC insurance can pay for senior living homes, assisted living facilities, daily care programs or home care — any aid for people who need help with activities of daily living, such as dressing themselves.

LTC insurance can be a guaranteed way to pay for intensive elder care, which, depending on the level of care needed, can quickly cost at least six figures per year. However, LTC insurance is also costly, and not all insurance providers offer it. A 55-year-old American man can expect to pay a premium of $2,200 per year on average for $165,000 long-term care insurance with a 3 percent inflation option, according to the American Association for Long-Term Care Insurance. A 55-year-old woman would pay $3,750 per year on average for the same coverage. Hybrid policies may cost even more.

However, Davern is a big fan of LTC insurance. Both her parents pay for their own policies, and Davern and her three siblings all have policies for themselves for the future.

“Having long-term care insurance, I think, provides that sense of security of, no matter what happens to the quality of my life or my parents’ life, we are financially able to deal with whatever comes our way,” she says.

5. Start financial conversations about elder care early on — before they’re urgent

Even if your parents are still healthy and aren’t thinking about elder care yet, you should consider sitting down with them now and asking if you can help them prepare for the future. This will give you more time to take any necessary financial steps, like saving money or taking out insurance policies. Having a plan ahead of time will also help you and your parents avoid having to make important decisions in a crisis.

There are varying ways to help your parents in their last years. For some families, adult children might eventually have total control of their parents’ finances, including estate, retirement and debt information, if they are no longer able to manage their finances themselves. For others, adult children might just want to know their parents’ health care and end-of-life preferences, like their preferred hospital or their funeral plans.

If your parents are open to it, you should also consider asking them to keep important identity and financial information — such as vital records and the account name and password to their financial accounts — in a safe place that you can access later. If you need to access or close their accounts, you’ll want that information easily available.

Together with her siblings, Davern has started sitting down with her parents to understand and organize her parents’ financial situation. This includes her parents’ medical information; the details of their estate, including whether they have outstanding mortgage balances and the name of their mortgage company; and their financial accounts, including their retirement accounts and their financial advisor’s information.

That’s just one example — every family is different. Your parents might not be ready or able to share information yet, and that’s OK. If you’re interested in helping them, tell them and be open to jumping in where you can.

The bottom line

Being caught between a relative’s financial needs and your own children’s often isn’t easy. But by planning early — perhaps much earlier than you think you need to — you can give yourself the tools to navigate hard decisions later. Just don’t forget to take care of yourself and your own financial needs along the way, too.