By the time you reach your 40s and 50s, you should be in a financial position to start focusing on your future. You should be comfortable enough in your current standard of living that you can begin saving for retirement and, if you have children, setting aside a little more each month for their college education. However, if you’re like many modern adults, you may find yourself facing a new set of financial challenges as part of the Sandwich Generation.
The Sandwich Generation comprises adults that are caring for their aging parents in addition to their children. If this sounds all too familiar, you are not alone. Nearly one out of every seven middle-aged adults fall into the Sandwich Generation, providing financial support to at least one aging parent and at least one child.i
With many children returning home after college and life expectancies increasing, it is safe to assume that the Sandwich Generation will only continue to grow over time.
Prepare Your Parents’ Finances
One of the most important steps you can take to prepare for the future is to sit down with your parents and discuss their finances in detail. Enter into that conversation now before health or financial issues arise. Learn about their savings, their debts, and any assets you may use if they are ever unable to access their finances on their own behalf. While it may be an uncomfortable conversation, everyone will be relieved that it occurred it if there is an emergency.
You will also want to make a plan in case they ever require additional care. Discuss whether they would prefer to move into your home, move into an assisted living community, or have in-home care and how you will pay for it. Having this conversation today will help you respect their wishes as they age, while ensuring there is enough money to cover their expenses and medical care.
Reach Out to Your Family
Taking care of an elderly relative can be overwhelming. Talk to your siblings, cousins, and extended family to develop a plan of how to best care for your parents while still allowing you to take proper care of your children. Juggling a full-time job, doctor’s appointments, and your children’s extracurricular activities can be challenging. Figure out who may be available to help make sure that your family is taken care of when necessary.
Tasks can range from a relative stopping by once a week to chat with your aging parents to splitting the financial burden of elder care amongst your siblings. The key is to find the right balance for your family without taking on all of the responsibility by yourself.
Never Lose Sight of Your Retirement
Almost half of all adults in their 40s and 50s have a parent over 65 and are either raising a young child or financially supporting a grown child.[i] Regardless of your financial commitments, it is important that you continue to fund your retirement savings. Even a small contribution each month can make a significant difference to your future.
Focusing on saving for your retirement now will help to ensure that your children won’t have to shoulder the financial burden of taking care of you in the future. Look for retirement accounts that provide tax incentives to make even more of your money and help you meet your financial goals faster.
Get Help from Your Children
For many in the Sandwich Generation, the financial struggle truly begins when their adult children return home after college as they seek their first job. Give your household some relief by asking your adult children for some form of payment for living at home again.
Your child’s rent payment doesn’t need to be financial if they haven’t secured a job. Create a list of items that they can assist with. Whether it’s helping to take care of a grandparent or cooking dinner each night, the extra hands can relieve some of the stress caused by having to take care of multiple generations of your family.
Take Time for Yourself
One of the biggest burdens of being a member of the Sandwich Generation isn’t financial – it’s the emotional stress of having to take care of two generations of your family. Take a break from the caregiver role every once and a while to focus on yourself.
You may also want to discuss with your family if it is worth hiring a professional to assist with your needs. A professional caretaker for your parents or a babysitter to watch your children can provide you with the reassurance that your family is being taken care of when you are not able to be there for them or when you are taking time for yourself.
Being a part of the Sandwich Generation can be stressful, but it can also be rewarding. Reduce your anxiety by creating a financial plan to help you as you support your entire family. Once the financial stress is removed, you will be able to focus on the positives of having all of your family so close. Enjoy the time you and your children get to spend with your parents. These are the moments you will treasure for the rest of your life.
[i] “The Sandwich Generation” Pew Research Center. http://www.pewsocialtrends.org/2013/01/30/the-sandwich-generation/
January 30, 2013
"Unique Financial Issues Faced by the Sandwich Generation"
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