Do you have any idea of how you would care for both your parents and kids? Would caring for your parents leave you broke? Whether you like it or not, at some point, your parents will likely need your assistance as they age. How you handle it is up to you.
Is Sandwich Generation Financially Prepared?
Realizing your parents are human may come as a shock. As we age, our parents may need more help and care.
Some of your parents have been good with their money and saved diligently for retirement. Sadly, just as many – and we’re talking huge numbers here — have not. Your parents may or may not word it this way, but some may have the attitude, “Well, kids, we footed your bills for 20-some-odd years and paid for college, so now it’s your turn to pick up the slack and pay for our care now.” This brings us to the sandwich generation. Are you financially and emotionally prepared for the financial crunch of caring for your aging parents?
What Is The Sandwich Generation?
Historically, the term sandwich generation has applied to children (often female) who are caring for both their aging parent(s) and their children simultaneously, as if caring for an elderly parent or raising a child isn’t stressful enough.
Pair many people having children later in life and large numbers of seniors struggling financially, and you have a recipe for disaster for the sandwich generation. This group can also include people responsible for helping grandchildren while caring for their aging parents. The emotional and financial burden can be intense.
Americans are living longer lives. This could include years of surviving things like cancer or some chronic illness. When I was younger, I remember my great-grandmother required around-the-clock care for nearly a decade. Luckily, this direct care did not fully fall on my parents (with their two preschool-aged children) but did still require at least weekly in-person check-ins.
Kids also stay at home much longer. I’m sure there are quite a few retirees out there who are still providing financial support for their children and grandchildren. Hopefully, this support will help their children be in a position to help provide care for them in the future when they inevitably will need it.
Sometimes, caring for parents may just mean helping them with a few things here and there. Others have their parents come live with them. It is also often common for the need for care to be so great that the child needs to quit their job to care full-time for an ill parent.
Perhaps you, as the child, just need to help cover some of the costs of a long-term care facility. While I say just, these costs could easily run $100,000 per year or more for a middle-of-the-road facility. Funding these costs for your parents could be devastating for the future financial security of your retirement or the ability to save for your kid’s future college expenses.
How To Cope With The Financial Burden Of Being In The Sandwich Generation
If your parents were to need help, how would you handle it? Would you be able to care for them while still caring for your kids? Where would the money come from to care for them?
If all this talk of caring for your parents and kids is making your head spin, don’t feel bad; it’s complicated and about as fun to deal with as a colonoscopy. Suppose you are expecting to be financially responsible for your parents in the future. In that case, many insurance products can provide financial benefits due to death or illness.
These benefits allow you to continue focusing on your own personal financial goals (retirement, college costs, financial independence, etc.). Consulting with a fiduciary financial professional can help determine if these products are suitable for your situation. Not all policies are created equally or provide the same benefits.
If your parents are still eligible, it could mean buying long-term care (LTC) insurance to help offset future LTC costs. Or, you could purchase life insurance on them to reimburse your family for the money you have spent on their care over the years. This isn’t about enriching yourself but keeping you on track for your financial goals while still caring for your aging parents.
Ensure you are working with a fee-only fiduciary financial planner to help you find the appropriate plan to reach your own financial goals while appropriately caring for your aging parents. Not to mention, you should avoid being sold some high-commission, high-fee life insurance or LTC policy that is not warranted based on your needs and goals.
Is There Hope For The Sandwich Generation?
I hope to live to about 100 and then pass peacefully in my sleep on my own bajillion-thread-count sheets at home, in bed, after a big, beautiful, tasty meal with family and friends. But I am aware the reality may not be so idyllic. Odds are my husband, or I will need long-term care or at least incur a major medical expense or two at some point in our lives. Maybe we will both be lucky; perhaps we won’t. But either way, the one thing we’re not going to do is leave it up to chance. Because we’re investing in the right insurance policies, we’ve got each other covered. You can do the same for yourself and your folks.
There is hope for the sandwich generation. Caring for your parents and kids at the same time will be easier if you are proactive and have a strategy to keep your sanity along the way. Waiting until your parent is in the emergency room will only add to the stress and chaos of an already difficult time.