Millions of Americans worry about saving enough for retirement while also providing for their children's future, but most overlook another set of dependents who could cost them even more: their parents.

They're members of the so-called "sandwich generation," and their numbers are growing rapidly. Approximately 16% of families are currently caring for an elderly relative, according to a PNC Bank survey, and this number is projected to double within five years. More disturbing, only one in five are planning for it.

But planning is essential. It's the only way to stop this self-perpetuating cycle. If you don't plan, caring for your parents could derail your own retirement plans, forcing you to lean on your children in your old age -- while they're also trying to raise their own children, pay off their student debt, and save for their own retirement. You can stop this crisis before it starts by taking the following steps today.

Mature couple looking at financial documents

Image source: Getty Images.

See if your parents qualify for assistance programs

You may not need to give your parents any financial assistance if their retirement savings fall only slightly short of their needs. Some government and private programs may help them pay for food, housing, utilities, and healthcare so you don't have to. Available programs will vary by location and your parents' financial situation, and you'll need to research what types of assistance programs are available to them. 

If they're over 65, Supplemental Security Income (SSI) may also be an option. In 2019, this provides up to $771 per month for an individual or $1,157 per month for a couple. These benefits are in addition to Social Security and may enable your parents to get by on their own. Even if you still end up offering them financial assistance, it's worth exploring these programs anyway because they might reduce how much you have to give them yourself.

Look for places to cut costs

Help your parents reduce their monthly expenses so their remaining savings will stretch further. Create a budget for them if they don't already have one and look for areas to cut spending. This may include cutting back on dining out or selling their home and moving to a more affordable place -- or in with you if you're willing to have them. 

Selling items could also free up more cash that your parents can use to cover their living expenses so they don't have to rely as heavily on you. Discuss what your parents have and what they may be willing to part with. Every little bit helps.

Create a plan

Gather together your parents, siblings, and spouse to discuss the plan if you need to provide financially for your parents. Make sure everyone has clear expectations of which of your parents' expenses you will and will not cover. Housing and healthcare are valid. A trip around the world is not. 

You also need to adjust your budget to figure out how you will cover these additional expenses. Consider cutting back on dining out, discretionary purchases, and travel, but don't sacrifice your own retirement savings or emergency fund. Doing so could imperil your own financial security, leaving you unable to adequately provide for yourself, your children, or your parents. 

You may have to tell your parents no and you may not be able to provide all the financial support they need, but stand firm. If you have siblings, they may be able to step in and provide some financial assistance as well, so you don't have to shoulder the entire burden on your own.

Consider life insurance

You may not be able to take out a whole or universal life insurance policy for your parents, depending on their age and health. But if it's possible, it's worth considering. It's another monthly expense you'll have to pay for, but when your parents die, the insurance payout will replenish some of your savings so your retirement plans aren't derailed. Weigh the costs of the policy and the financial assistance you're providing to your parents against the policy's payout to decide if it's a worthwhile investment for you. 

Adjust your retirement plan to help your own kids

Helping your parents retire could impede your ability to save for your own retirement. Rather than putting your children in the same situation, consider delaying your own retirement or working part time in retirement to reduce the amount of savings you need to cover your retirement expenses. You may also want to consider downsizing or taking other steps to reduce your retirement living expenses.

It'll probably never be easy, but with careful planning, you can prevent having to care for your parents from turning into a full-blown calamity. If you foresee this as a possibility, sit down with them and discuss their financial situation and how you can help support them without hurting your own future.