The New Sandwich Generation

The two biggest pay raises you’ll ever get happen the day your youngest child finishes college and moves out of the house and the day you pay off your mortgage. Plow the extra money into savings and soon you can retire.

At least that’s how it used to be. These days, a growing number of Americans are supporting struggling adult children while carrying mortgages deep into their 60s. It’s the new sandwich generation–a term that originally referred to those forced to put off retirement because they were paying for their kids’ educations and spending heavily to care for their aging parents. But in the wake of the real estate crash and prolonged economic malaise, boomers are feeling a new squeeze.

Getting unstuck may be tough. Many members of this cohort took out large mortgages or did cash-out re-fis during the housing boom. According to Strategic Business Insights’ MacroMonitor, 39% of households headed by 60-to-64-year-olds had primary mortgages in 2010, up from 22% in 1994. What’s more, the housing bust means many may owe more than their homes are worth.

Not that selling and downsizing is an option. Tough times have led more grown children to move back into (or never leave) their parents’ homes. A recent government survey showed that 5.9 million people ages 25 to 34 live with their parents, up from 4.7 million prerecession. Given that unemployment among young workers is near its highest level since the government began keeping track in 1947–and is higher than for any other age group–they may not leave the nest until the economy starts creating jobs in significant numbers, which means boomers could remain sandwiched for a while.

MEDIA

1 MILLION

Estimated number of customers Netflix lost after it raised the cost of its most popular membership option by 60%; the streaming-movie and DVD- by-mail service has 24 million subscribers.

DEAL DOWNGRADE

Groupon’s Morning-After Problem

Do Groupon users suffer buyer’s remorse? A new study from professors at Boston and Harvard universities suggests that people who use daily-deal sites end up unhappier than those who pay full price. According to the study, customers who mentioned Groupon on the review site Yelp awarded an average of 10% fewer stars than those who didn’t. Companies could be treating their Groupon customers differently. Or those users might be a pickier bunch. Either way, Groupon users might want to think twice before leaping at deals.

TRAVEL

Raising Prices, Cutting Seats

Even after airlines bumped up ticket prices 10 times this year, it’s almost certain that more fare increases are on the way. Most major U.S. carriers, doubtful that the domestic economy will pick up anytime soon, plan to reduce seating capacity or keep it at current levels next year. Delta will decrease available seats by 2% to 3% (on top of a 4%-to-5% dip in 2011); American, by 0.5%. Southwest, United and Continental will remain flat. So if you plan to fly early next year, start shopping in October. “Every day you wait, you basically add $5 to your ticket price,” says Rick Seaney, the CEO and a co-founder of FareCompare.com Another money-saving tip? “Tuesdays are still the best days to get cheap tickets.”

To read more personal-finance stories, go to moneyland.time.com