Sandwhich Generation: Caring for Children and Parents

Sandwich Generation - Mark Stratis

Are you a part of the “sandwich generation”? Are you providing support and care for your parents as well as your children? Then this article will speak to you.

As we continue to experience the effects on society and the economy of our aging population, there is a rise in the number of households that are being categorized as “sandwich generation.”

This phenomenon can be particularly apparent in “boomer” households, where elderly parents may be in need of care as well as children still living at home or dependent on support. This situation and others like it often require time and/or monetary involvement by those identified as “sandwich.”

In an earlier part of their lives, members of the “sandwich generation” were most likely faced with the more traditional choices of cash flow and budgeting. That was usually identified as saving for a specific goal, such as a new home, in addition to retirement savings and college savings for children. As time passed, some of those goals may have been replaced by the need to take care of parents and children.

It is not unusual to find a household of “fifty-somethings” with septuagenarian (70 to 79 years old) or octogenarian (80 to 89 years old) parents and children in the teens and twenties. How does one then properly prepare to handle this situation should it arise?

  • What legal steps should be investigated?
  • Should there be updated or revised wills?
  • Would the creation of a trust be advisable in my circumstance?

Conversations with an estate planning attorney are suggested as a step to try to help put some clarity to what could otherwise be confusing and confounding. Or it may be the need to properly identify assets and savings with regard to specific uses.

It is common to have a discussion on the idea of how to handle personal savings in an effort to solve for multiple demands on your finances. Did the grandparents set aside enough for their retirement, or will you have to use your savings to supplement your parents? Did you discuss with them how to manage for retirement? What are you doing with your own retirement?

What about long term care? Statistically, for those over age 65 there is a 70% chance of needing some type of long-term care. Who will pay for it? Will you, in a self-insured way, or an insurance company pay for those expenses?

Is there an expectation of support from you for your children’s college plans?

Has a sinking fund been created to help with college expenses or will it be a pay as you go? What if you had plans to return for more education?

Everyone needs a basic estate plan. The estate plan should accomplish more than a transfer of wealth.

All of this may lead to that conversation about “leave behind” money or “live on” money. Take the time to review your plans with your advisor to try to gain more control on your personal situation.