What is the sandwich generation?
The sandwich generation is a relatively new term used to describe group of people, typically in the late 30s through 50s, that are caregivers and/or financial supporters for both their children and aging parents. This support can create stresses as the limited resources of time and money of the sandwich generation are stretched to meet the demands of 3 generations. To minimize this stress, consider the following items.
Learn what is most important to your parents
While sitting down with your parents to discuss their wishes can be stressful in itself, it can be one of the best ways to find out what is important to them so that you can help them reach their goals.
Topics for discussion should include their wishes for how they want to be taken care of when they can no longer take care of themselves and how to pay for it. Also, their wishes for being resuscitated should a serious medical condition occur to them should be discussed with the understanding that these wishes can be changed as circumstances change.
Make sure they have a plan for financing their retirement
If your parents have not made a plan for generating the income needed to finance their retirement, helping them put one together can relieve some of your anxiety for understanding their preparedness and your potential financial contribution to them in the future.
Help them take an inventory of their dependable income such as social security, pensions and annuities and compare it to their living expenses. Then review their assets such as stock, bonds, CDs and real estate that can be converted into cash to help meet any monetary shortfalls. With life expectancy approaching 90 for at least one parent who reaches age 65 and the effects of inflation, making sure there are funds for the long run can make both of you feel less anxiety about the future.
Prepare for your own retirement
Helping yourself prepare financially for retirement can reduce your stress about your need to lean on your children or parents in your retirement. Take advantage of the tax incentives our government provides in contributing to an IRA, 401(k), 403(b), Roth IRA, or Health Savings Account (HSA) to create a nest egg that will grow tax-deferred, allowing the magic of compounding to build your wealth.
Sit down with your children
While sitting down with your children to discuss your wishes can be just as stressful as sitting down with your parents, it is also one of the best ways to let your children what is important to you. Discuss your wishes for how you wish to be taken care of when you can no longer take care of yourself and your wishes for being resuscitated should a serious medical condition occur to you.
In addition, meet with a qualified advisor to consider whether any changes should be made to your portfolio if passing assets down to your children is important to you. Review documents such as wills, trusts, advanced health care directives, medical and durable powers of attorney and make sure they are updated with your current wishes.
If you are a member of the sandwich generation, you can reduce your uncertainty and stress through communication and planning with both your parents and children. Use the services of professionals to help you and your family reach their goals, both financially and in lifestyle.