Are You Apart of the Sandwich Generation?Submitted by Edwards & Associates Financial Services, Inc. on November 25th, 2016
THE CHALLENGES OF THE SANDWICH GENERATION
For many Baby Boomers, the phrase “stuck in the middle with you” probably brings back to mind the familiar tune of the 1970s song, and perhaps even a few associated memories of our lives at that point in time. What friends we hung out with, what we spent our money on, and what our thoughts were on what we thought was important at the time. In today’s time, however, that same phrase is bringing about new feelings to some baby boomers as they find themselves feeling stuck in the middle of caring for both growing children and aging parents. The phrase sandwich generation is becoming a generational synonym for baby boomers.
Studies from the PewResearchCenter: Social & Demographic Trends1 reported:
“With an aging population and a generation of young adults struggling to achieve financial independence, the burdens and responsibilities of middle-aged Americans are increasing. Nearly half (47%) of adults in their 40s and 50s have a parent age 65 or older and are either raising a young child or financially supporting a grown child (age 18 or older). And about one-in-seven middle-aged adults (15%) is providing financial support to both an aging parent and a child.”
With 10,000 Baby Boomers a day turning 65, this trend will only increase with time and will become the new norm for Generation X’ers to handle in the future as the older Baby Boomers, who are the caregivers of today, will be the recipients of caregiving tomorrow.
With the Baby Boomer buldge pushing through the retirement time line there has been an increasing number of studies conducted regarding the process of aging gracefully to help to caregivers and their recipients. It is now understood, for example, that the majority of seniors prefer to remain in their own homes, living their own life as much as possible while only relying on assistance in areas that their aging bodies may require or for companionship. Independence remains high on their priority list. The question is, have they properly and financially planned for that?
If you have an aging parent who needs to be cared for, you may find yourself in the 15% of children who end up caring for their aging parent in addition to their own families and careers. Without proper planning financially, emotionally and physically, this time of caring for multiple generations can bring a heavy burden to bear on the primary caregiver as well as relationship stress between other family members.
So what can you do if you are currently in this situation, or believe you will be soon?
Care for an Aging Parent:
- Strive to have a family meeting with your parents and siblings to discuss the level of care needed and how best to provide it before care is actually needed.
- Will the parent remain in their own home?
- Will they need part-time or full time care/assistance?
- Can they afford to live in an assisted living facility that provides different levels of medical assistance?
- Will they need to move in with one of their children? If so, how can this be equally divided among the children?
- Will caring for your parent reduce your personal current income? Will you need to reduce your work hours to help care for a parent? If so, do you need assistance from your parents or siblings, financially, to provide that care?
- This is the time for full transparency. Talk to your parents about provisions they may already have in place.
- Do they have a long-term care policy, investments or veteran’s benefits that can used to provide the funds for care?
- Have they sought legal counsel for necessary documents? I.e. general durable power of attorney, living will (this will address the end-of-life care), will, etc.
- Do you know where they keep all their legal documents, list of medications taken and contact information of friends and professionals?
- The old adage, “people don’t plan to fail, they just fail to plan” holds equally true here. We recommend if a parent becomes your primary responsibility you may want to consider speaking with a geriatric care manager to ensure all important areas have been addressed. Unless you’ve cared for an elderly parent before, there will probably be a lot of new things to consider that you may not have thought of on your own.
- Most communities have day-time programs designed for the elderly and may prove to be a great outlet for building new friendships and fun activities for your mom or dad.
Cost for Adult Children:
In March 2015, Time Magazine’s cover article was on the subject of longevity and had a baby’s face with the wording: “This baby could live to be 142 years old.”
With the life expectancy for Baby Boomers now hovering around 87, this may be more of a reality than one could have ever imagined just 20 years ago. Are the majority of our children, Generation X and Y, going to live to be 100? It’s entirely possible.
In past generations, our parents and those before them looked forward to their ‘golden years.’ A time when they would retire in their early sixties, live off their pension checks and enjoy the last ten-twelve years of their lives. For our generation, we are finding ourselves approaching a much different landscape. Many do not have pension plans to count on and may be concerned with the state of social security funding. Also retirement can last up to thirty years, instead of ten to twelve years, due to advances in healthcare, drugs and medical knowledge. With that said, our generation is potentially facing a unique challenge not experienced by those before us of living longer, on less money, while trying to also care for and financially support other family members in two other generations.
With all these variables factoring into our future, I think it prudent we get our arms around the fact that there is a greater possibility of us outliving our finances if we aren’t careful now during the critical years.
The same PewResearch Center Report noted above went on to further state:
“While the share of middle-aged adults living in the so-called sandwich generation has increased only marginally in recent years, the financial burdens associated with caring for multiple generations of family members are mounting. The increased pressure is coming primarily from grown children rather than aging parents.
According to a new nationwide Pew Research Center survey, roughly half (48%) of adults ages 40 to 59 have provided some financial support to at least one grown child in the past year, with 27% providing the primary support. These shares are up significantly from 2005.”
Many Baby Boomers, unlike our predecessors perhaps, started their families after establishing a career. Now, at a time when some imagined they would be wrapping up their careers to settle into the sailboat, their parents are aging and their children are heading off to colleges with huge price tags affixed to them. Unless financing family needs without compromising your own retirement is not a problem, there will need to be some thoughtful conversations and maybe even deliberate decisions made to ensure you aren’t setting yourself up for unnecessary troubles down the road.
There are a couple options for college which offer programs to cover the first two years of college for free or at a reduced price. There are various options and strategies for saving on college expenses while you are striving to build your own retirement account and protect your child from graduating college with an unneeded and unmanageable amount of debt.
For those children who are returning home post college (the boomerang generation), there needs to be an honest conversation about financial responsibilities and expectations prior to them moving in. While the temptation is to provide financial support to our children, it is critical that you avoid either dipping into your retirement savings or reducing your regular retirement contributions. Our years of contributions are limited and the quality of our retirement years is determined by our actions today. Our children, however old they are, have more years to pay off their student debt and get established than we have years to prepare for our retirement. The temptation may be to remain the “providing parent” and to support them financially– but you must be careful to take care of your finances so as not to compromise either your future, or your children’s by becoming a financial burden on them.
Care for Yourself:
As a caregiver, the added level of stress is real and can lead to personal health issues or family relationship issues. I’ve seen the effects of stress on the most loving family members and know that the challenges faced by the caregiver can feel daunting. For this reason, times of rest (breaks) are very important. Be sure to build those times in for not only your sake, but for the sake of your spouse and children as well. This is the time to remember to put “you” first. Just like the instructions we receive before our plane takes off – in the case of an emergency “put your mask on first” – this holds true regarding your personal health and well- being. There are a lot people relying on you – you need to be rested and healthy for the days ahead so build into your schedule break times where you can recharge.
While you are younger and healthier, consider purchasing some kind of long-term care product that can provide for you in the future at the level of care you desire. Not only will this afford you the opportunity to dictate the lifestyle you wish to live in your golden years, but it also removes the stress from your children to have to assume the role that you currently may find yourself in with your elderly parent. There are great hybrid products out there now that can be used as an investment/life product OR converted to long-term care should you need it. Thus allowing you to use the original investment amount as you deem best because no one knows the future.
Another great support is the number of local support groups which have arisen for people who find themselves sandwiched in the middle. If you find yourself entering that situation in life, a support group may prove to be a valuable tool.
Are You In the Sandwich Generation?
Start considering your plan!
- Have a family meeting about expectations and financing for aging parents.
- Determine how much you, as the parents, will be paying for college and how much the adult child will be responsible for.
Remember to take advantage of state programs!
- Take care of yourself; financially and emotionally.
Consider hybrid long term products and what a daily rest looks like for you.
Take the Next Step
Discuss your options with a professional who can help you plan and think through which products offer the best solution for you and your loved ones.
Please contact us for a free consultation – we would be happy to meet with you as you plan for your future and your family!