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The Sandwich Generation: How to Financially Care For You, Your Kids & Your Parents

As a parent, you have one of the most important jobs in the world—raising and encouraging the next generation. Some parents, however, may find that they’re sandwiched between raising their kids and caring for older loved ones. Aptly named the “sandwich generation,” those in their 40s and 50s may be feeling the pressure of being stuck in the middle. In fact, a recent study suggests that almost half (47 percent) of adults are part of the sandwich generation.1  

If you’re a loving parent and adult child caring for parents of your own, how do you strike a balance between your financial well-being and your child’s and parents’ needs?

Understanding Your Situation

You may feel compelled to provide care for your aging parents in addition to raising children, meaning you don’t mind the added responsibility. However, stretching yourself financially between saving for college, preparing for your own retirement, and covering your parents’ costs can be a tough situation to find yourself in. And, depending on how much care your kids or parents require, your income stream could be affected.

That’s why protecting your own financial standings when caring for loved ones should remain top of mind. Finding that balance is, of course, easier said than done. But here are a few ways to ease the financial toll of caring for elderly parents while doing your own parenting.

Tip #1: Build Your Support Network

Sometimes, people feel like they need to shoulder all the responsibility in caring for their elderly parents. You may be the oldest sibling in your family, considered the most responsible, or simply live closest to Mom and Dad. But if you find that the caretaking is becoming too much for one person, it may be time to have a transparent and honest conversation with your siblings or other family members. They may not know just how much added responsibility you’ve taken on, and they may be just as eager to help.

Family members aside, it can also be beneficial to gather a team of financial professionals. Your financial advisor, for example, can help keep your financial priorities top of mind while also helping you develop a game plan for managing your caretaker responsibilities. Other professionals you may want to engage with include accountants, estate planning attorneys, insurance agents, and college planning professionals.

Tip #2: Keep Your Savings Goals in Mind

Remember, you cannot help others financially or otherwise if your own financial standing is in jeopardy. Trying to put a kid through college while caring for aging parents can drain your savings quickly if you aren’t careful. That’s why making your own financial goals a priority, though not easy, is important.

In fact, staying focused on your long-term financial goals (such as retirement) can actually be thought of as a way of protecting your own kids. Emptying your retirement accounts early or neglecting to save enough for retirement could leave you in a bad spot later in life. In turn, your children may find themselves providing for you financially while they’re raising kids of their own. Remembering to prioritize your long-term goals now can help set you, your children, and your grandchildren up for a less stressful financial future.

Tip #3: Create Boundaries for Your Children

If your kids are college-age or older, you may be able to set financial limitations with them. This won’t be easy, but it may be necessary in certain circumstances. If they don’t already work, encourage them to find a part-time job. And if they’re already earning an income, help them develop a budget and become as self-sufficient as possible. You may even find that, when presented with the opportunity, your kids are able to rise to the challenge and learn good money habits from being less financially dependent on their parents.

If your kids are younger, start working with them to understand the importance of saving versus spending. That way, when they’re old enough to start earning money of their own, they’ll be well prepared to work toward financial independence from you.

Tip #4: Consider Investing in a Long-Term Care Policy 

A long-term care insurance policy can cover a number of expenses that are not typically covered by health insurance. These could include assistance with activities of daily living (ADLs), such as bathing, dressing, and eating. Care may be provided wherever your parents are living, whether at home or in a nursing or adult day care facility.

A long-term care policy is typically bought when individuals are in their 50s or 60s, as a policy can’t be obtained once a person has been diagnosed with certain debilitating conditions or diseases. Depending on your parents’ health, you may still have time to purchase a policy. If not, you may want to look into obtaining a policy for you and your spouse if you’re concerned about your own future care needs.  

Protecting yourself, your parents, and your kids requires careful strategizing, discipline, and planning. It’s a balancing act, but it’s one you don’t have to perform alone. Your financial professional can help steer you in the right direction while keeping your financial goals a priority.

As always, we welcome any questions you may have about your finances. Reach out to Deb to review your situation and gain some perspective on what your options are.

  1. https://www.seniorliving.org/caregiving/sandwich-generation/

This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.