Sandwich Generation Needs Are Becoming a Mouthful

Finding yourself as part of the sandwich generation has always been a challenge; adults, traditionally women, may face the need to care for aging parents and young children simultaneously. But, what was once a difficult panini-like scenario of pressing needs has morphed into a triple- or sometimes quadruple-decker club sandwich that makes it hard to know where to begin. Many caregivers are caring for their parents while financially supporting adult children or young grandchildren, or even all three.

The situation shouldn’t be surprising when you consider the factors. Americans are living longer, as the average life expectancy has increased by 2.3 years from 2000 to 2019. The pandemic caused assisted living rates to rise 6.15% in 2020 and another 4.65% in 2021, according to a survey conducted by Genworth Financial. Inflation, high college tuition, and explosive APRs in the housing market mean more young adults are struggling to pay their bills and purchase a home. In July 2022, half of young adults aged 18-29 were either still living at home or had moved back in with their parents, compared to 38% in 2000. Piling it on, more people are waiting to have children until later in life, increasing the chances of overlap in caring for young children while caring for parents. This adds to the pressure faced by working parents who may find the caregiving overload coincides with statistically the most productive career years, from age 40-50. The result? Increased financial and emotional pressures, along with retirement-planning challenges. For many in the sandwich generation, the panini grill has morphed into a hydraulic press. So, what’s the solution?

Limit the Layers

Before you get stuck between a rock and a hard place, or, in this case, two slices of caregiving, there are some steps you can take to limit the pressure down the road.

• Have conversations with your parents now about their financial plans for the future.

While it may be uncomfortable, financial gaps in their retirement or healthcare plans could lead to unfortunate consequences for them as well as you, including limited senior care options or running out of retirement funds. For help getting the ball rolling, visit our blog on conversation starters, and make sure to include long-term care insurance in your discussion.

•  Hold a family meeting to discuss financial expectations with your teens or adult children and your parents.

Remember: the goal isn’t to leave everyone feeling like there’s a dollar amount on your love but to encourage healthy relationships, wise financial decisions, and an environment that acknowledges everyone’s needs.

• Start saving for your children’s education now.

529s, ESAs, and custodial accounts are all great options for stretching your money further, which, in turn, lessens the financial burden of college expenses for you and your children down the road. They may still ask for your assistance, but saving early can enable you to help more effectively. If your kids are in high school, research scholarships and school options that fit your budget.

Stop the (Sandwich) Press

If you’re in the thick of it, it’s easy to feel overwhelmed by day-to-day demands on your finances, time, and energy. You’re not alone! Small steps can help lessen the squeeze.

• Review your budget.

Helping cover expenses for your parents and adult children, as well as working less to focus on caregiving, means your budget is likely due for a makeover. Make sure you’re cutting spending as needed and still able to pay off any debt.

• Don’t stop saving.

It may feel overwhelming to continue saving for retirement while facing increased financial demands, but reducing your saving is much better than cutting it out entirely. Like the proverbial airline instructions, you need to put your own oxygen mask on first before assisting others. Neglecting your own savings can result in putting your children in the same situation you’re in now.

• Review your taxes.

Reducing what you owe through deductions or tax credits can help lessen the financial strain. If you pass certain requirements, you may be able to claim your parents as dependents. You may also qualify for caregiver expense deductions, like modifying your home to make it wheelchair accessible.

• Go over Social Security and Medicare with your parents to help them determine when to start taking Social Security benefits and compare healthcare options.

Having the right Medicare plan and enrolling at the proper times can save you money. It’s also a good
idea to examine your own financial plan and see how Social Security fits into your strategy.

While the needs may feel like they’re closing in faster than you can meet them, having a plan that you can work on one day at a time is a step in the right direction. Your financial advisor is a valuable resource and cheerleader who can help you ease the pressure and take caregiving one (manageable) bite at a time.