Sandwich generation feeling the squeeze

The Pew Research Center recently released some scary, scary stats about middle-aged adults:

• 27% provide primary support for a grown child.
• 21% have provided financial support to a parent aged 65 or older in the past year.
• 38% say both their grown children and their parents rely on them for emotional support.

The challenges of the "sandwich generation" aren’t news per se. For several  decades I've been reading about how physically and psychologically exhausting it can be to see the needs of the older and younger generations (while putting your own needs on the back burner).

It's the monetary drain that concerns me. Specifically: If you're helping out parents whose retirement money doesn't stretch far enough, and picking up the slack for your under- or unemployed kids, what happens to your own finances?

"Michelle said she and her husband don't take vacations anymore, just trips to help their children and her mother. Her husband would like to slow down, she said, but is hesitant to retire when they have so many financial obligations," the newspaper noted.

"It's very different from when she reached adulthood. She left home after high school and never returned to live in her parents' home. She was living on her own until she married at age 24.

"'Kids are dependent on parents a lot longer today,' she said. 'I don't know if it has to do with the economy or the way we raise them'."

My guess is that it's both. Salaries aren't keeping pace with inflation even for seasoned workers. Kids who graduate with heavy student loan debt may not be able to make it on entry-level paychecks, especially if they're unwilling to live an entry-level lifestyle. (Hint: Your parents didn't have all that nice stuff right at the start, either. They worked their way up to it.)

Increasingly, though, soft-touch parents have become the soft place to land. Michelle, the woman quoted above, mentioned that the "revolving door" school of parenting is common among her acquaintances: "Kids transition in and out."

That can work well, as long as both parties are clear on what's expected. One dad I know let his 19-year-old daughter live at home for free as long as she took college courses and worked at least part-time. When she stopped doing both, he told her she had to leave.

Some people I've told that story to were horrified: How could he do that to his own child? I see it differently: How could he let her think that the world owed her something?

Talk it over
That Washington couple's situation isn't exactly average -- how many people do you know who could afford payments like that? -- but it illustrates the issue pretty well. Here's what I'd say to them, and to anyone feeling sandwiched: Put on your own oxygen masks first. You can't help anyone unless you're seeing to your own needs sufficiently.

Ideally, before your kids reach adulthood you'll be clear about what you will and won't pay for once they turn 18, such as "You can live here for nothing if you decide to go to college/trade school locally" or "Your college fund will cover four years of school and we'll pay dorm fees for that long -- but no longer."

You might also have to have this conversation with your aging parents. Scrutinizing their finances may feel like an invasion of privacy, but you need to know whether they have enough for basic expenses plus some creature comforts. If they don't, then you and other family members need to brainstorm other options for elder care.

And if you're already in the thick of it, like the Washington folks? Time to retrofit some boundaries: OK, kids, as of the end of 2013 we will no longer be able to subsidize you. That gives you the rest of the year to figure out a more sustainable way of living.

Incidentally: Those boundaries need to be ultimatums, not lifestyle options.

Saying 'no,' if you must
Putting off your own retirement, or working yourself to death to keep other people comfortably ensconced, is not the right way to do things.

If you need to say "no," then say it. That won't be fun. But it's necessary.

Full disclosure: I supported my own daughter, who has a chronic illness, for a couple of years until her disability claim was approved. To me, that's different from someone who wants to stay up all night playing "World of Warcraft," sleep until mid-afternoon and then sit on the couch eating cereal and watching reality TV shows.

My daughter's story ended well: She eventually found a job she could do from home, with a boss who is flexible about hours, and was able to get off disability. Now she and her husband (who also has chronic health issues) are paying a mortgage -- and supporting his parents, who moved in due to long-term unemployment and impending bankruptcy. Ironic, huh?

As for that late-teens girl who was shown the door by her tough-love papa: She knocked around for a while, rooming with various people, until she realized there was no future in that lifestyle. Now she's in her early 20s and back living with her father and stepmother, taking college classes and working a couple of part-time jobs.

She's also paying rent. Now that it's expected of her, guess what? She finds the money every single month.

Readers: Are you helping support an older or younger relative? Got any tips to share?

More on MSN Money:

• Maybe you shouldn't go to college
• Why you should be a mean parent
• Simple retirement can be satisfying