Living in the sandwich generation

Two trends are impacting many middle-aged Americans: people are living longer compared to past generations and children are relying on their parents further into adolescence and early adulthood. These trends have together created “the Sandwich Generation,” or adults supporting a parent and grown children at the same time. Members of this generation help those younger and older than them, with support ranging from financial and emotional assistance, help with day-to-day living and care, and significant time away from work helping parents and children handle affairs.

Caring for parents

If you’re part of the Sandwich Generation, or if you could see yourself becoming responsible for the care of an aging parent, there are a few subjects you’ll want to consider along the way while planning.
First, talk with your parent(s) and have an honest and open discussion about their personal finances. You will want to know what sort of situation they’re in, so that you can be prepared if one or both parents become unable to pay bills or handle day-to-day tasks. Consider discussing the following topics:
  • Sources of income, debt, and assets: Are they drawing from retirement accounts or pension plans? Do they have a financial advisor? Where are their accounts and how can you access them? Do they pay their bills electronically (if so, what are the necessary user names and passwords)? What’s the status of all of their debts, including their mortgage?
  • Healthcare Proxy: Discuss with your parents (and possibly an attorney) how to allow for you to make decisions with their doctor in the future if they can no longer make decisions for themselves.
  • Choosing a long-term care arrangement: At some point, your parents may need to move to a retirement community or assisted living facility.  Discuss expectations and concerns they may have. Ask your parents if they have life and long-term care insurance to help cover costs in the event of serious illness or death. If the answer is no, help them compare options and choose a plan.
When researching care facilities, be sure to ask many questions to assess the level of care provided there. Specifically, ask about the frequency of physicals and other medical visits, the ratio of staff to patients, and past complaints filed at the facility. Facilities should be forthcoming about information related to any of these questions, and any withholding of information should be a warning sign.

During this time, it’s important to keep your spouse or partner in the loop by discussing your income and expenses and how caring for your parents will impact your family’s budget.
For more information, visit our section on Aging Parents

Prepare important documents

Next, make sure the legal documents of your parents (as well as your own!) are in order for when you might need them. We suggest that you speak to your attorney about what documents you and your family need to address your personal circumstances. The documents should be kept up to date and handy.   Some of them to consider are:
  • Durable Power of Attorney: A written authorization to represent or act on another’s behalf. Check if your financial institution has its own form or whether you can provide your own.
  • Healthcare Proxy: A document which outlines who is appointed to make medical decisions on your parents’ behalf if they are no longer able to do so themselves
  • Living Will: A statement that describes your parents’ specific wishes when it comes to medical treatment should your parents be unable to make these decisions during a time when it is necessary
  • Last Will and Testament: A legal document that defines how an estate or property will be managed or divided after someone has passed away
  • Access to key bank accounts and doctors: Should one or both of your parents be unable to make decisions for themselves, it will be critical that you have information on and access to all of their financial accounts as well as the ability to speak to their current physicians about their condition.

Caring for grown children

As a middle-aged American, you are more likely providing financial support to a grown child than to a parent. Sociologists have noticed more parents paying for their children for longer periods of time over the past three decades.2  For most parents, financial assistance is provided to children while they are still in school, although 36% of those giving say they are doing so for another reason.3  More adults have returned home while looking for jobs, and there is even a rise in married couples moving back to a parent’s house. Another factor contributing to adult children living at home longer is that many adults in recent years have chosen to delay childbearing until later in life.4
If you have a disabled child with significant needs, planning for his or her future care is not only smart, but doing so will give you greater peace of mind. A trust designed to address “special needs” can help streamline estate planning. Additionally, you may be qualified to open a tax-free savings account to cover expenses not covered by government-sponsored programs.

Take care of yourself and ask for help

Because taking care of your parents and children can become overwhelming at times, pause and remember to take care of yourself and remain positive. After all, your family’s future depends greatly on how you plan today. With your family counting on you, you need to stay healthy! Don’t be afraid to ask for help, whether that means seeking out community resources or scheduling an appointment with a financial advisor to help make sure your finances are on track. You should also consult with your tax and legal advisors to discuss your planning needs.
In addition to your emotional health and well-being, you can help remain financially healthy by considering the following:
  • Maximize your retirement savings: Think about putting away a set amount of money each month into a retirement savings account, such as an individual retirement account (IRA) or an employer-sponsored 401(k). By doing so, you are helping your own financial future and establishing a better situation for your children when you age.
  • Contribute to emergency funds: Most financial planners advise putting away six months’ worth of living expenses for emergencies. This is especially important if you are taking time off work to care for family.
Planning ahead can leave you well prepared for the future and alleviate some of the burdens inherent in living in the Sandwich Generation. Preparing for bumps in the road will allow you to focus on the most important part of the journey—caring for those that cared for you for so long.
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1 The Sandwich Generation, Pew Research Center, 1/30/2013 -
2 Sandwich generation takes a hit supporting adult children and aging parents, Washington Post, 1/29/2013 -
3 The Sandwich Generation, Pew Research Center, 1/30/2013 -
4 Sandwich generation takes a hit supporting adult children and aging parents, Washington Post, 1/29/2013 -
5 The Sandwich Generation, Pew Research Center, 1/30/2013 -
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