Are you feeling overwhelmed because you find yourself caring for both your aging parents and your children? If you are juggling the responsibilities of providing care for both generations, then you are part of what is known as the “sandwich generation.”
The sandwich generation refers to adults who are concurrently caring for a parent who is 65 years or older, while also raising a minor child or financially supporting an adult child. This group typically consists of middle-aged adults between the ages of 40 and 60.
Within this unique generation, there are three distinct types of sandwich arrangements: traditional, club, and open-faced.
The traditional sandwich generation includes adults who care for their aging parents and also provide support for their own children.
In the club sandwich arrangement, individuals in their 50s or 60s find themselves caught between their aging parents, their adult children, and their grandchildren. Alternatively, adults in their 30s and 40s may be caring for both young children and aging parents or grandparents.
The open-faced sandwich category encompasses anyone else who assists with senior care.
The dual responsibility of raising children while planning for retirement and caring for aging parents can create significant emotional and financial challenges. In addition to meeting your parents’ daily needs, you may also have an active role in managing their finances.
While some people find this to be a straightforward task, only providing basic oversight by reviewing statements and bills, others may need to step in as trustees for their parents’ trust. Acting as a trustee is often more complex than anticipated, and trustees have a fiduciary duty that requires them to adhere to the terms of the trust.
If this situation applies to you, it is important to assess and discuss both your parents’ and your own financial situations together. This evaluation will help determine what your parents can afford and whether you have the means to assist them financially. The discussion should include their wishes, expectations, and the reality of their financial capabilities. Do they expect to live with you, in their home, or in an independent senior living community?
As you review your parents’ finances, inquire about their long-term care insurance. This insurance can help cover expenses associated with aging, such as nursing home care, in-home care, and medical expenses. Depending on the policy, it may partially or fully cover the costs of your parent’s care and provide protection in the event of unexpected medical crises. While long-term care insurance can be costly, it is typically best to purchase it when the insured person is in their 50s.
If managing your parents’ finances feels overwhelming, consider seeking assistance from a certified financial planner (CFP). A CFP can help you and your parents understand their financial situation, discuss estate planning, review long-term care insurance policies, and project cash-flow based on various assumptions. This guidance can alleviate the stress of managing your loved ones’ finances, allowing you more time to focus on other responsibilities.
Organize and Manage Finances
It is critical to create a realistic budget for your family as you clarify your parents’ financial priorities. This will help you track your spending and ensure that you can continue to provide for your children’s and potentially your parents’ needs. Include all expenses in the budget, including housing, utilities, food, medications, insurance, and non-essential expenses.
Plan for Retirement
Although it can be overwhelming to balance caregiving obligations, it is important to prioritize planning for your own retirement. Make sure you have the necessary estate planning documents in place and allocate funds for retirement, even if it’s difficult. By staying focused and proactive, you increase your chances of achieving the lifestyle you desire during retirement.
Hold Family Meetings
Communication with your parents about their future care and finances is essential. Identify their priorities and determine the roles of family members in assisting them. Creating a unified plan will reduce misunderstandings or conflicts and ensure that everyone is working together towards common goals. Before each family meeting, establish an agenda to keep the discussions focused and productive.
Curate Resources
The California Department of Aging (aging.ca.gov) offers a range of resources for caring for the elderly. Their online guide, “Over 60? Here’s How to Thrive in California,” provides direct links to aging services in each county. Utilize these resources to access referral information for services such as adult daycare, respite care, home repairs, personal care, and more.
If you find yourself in the sandwich generation, you are likely facing unique financial challenges that require careful planning and prioritization. Set clear priorities, take advantage of assistance programs, create and stick to a budget, and save for your own retirement. By communicating openly with your family members about boundaries, goals, and objectives, you can successfully manage your time and finances while providing care for your loved ones.
Teri Parker is a vice president for CAPTRUST Financial Advisors. She has practiced in the field of financial planning and investment management since 2000. Reach her via email at [email protected].
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