Are You Part Of The Sandwich Generation?

By The Lerner Group on October 19, 2021

If you are caring for young or adult children and elderly parents, congratulations, you are officially a member of the Sandwich Generation. The sandwich generation is caught in the middle—supporting children and parents often financially, physically and emotionally.

Providing this support to loved ones can be stressful and overwhelming and can require life sacrifices. As a caregiver, you want to keep everyone safe, happy and healthy, but you can’t neglect your own needs.  It is important to prioritize your retirement savings, emergency preparedness and cash flow. 1

Multigenerational households have become more common throughout the COVID 19 pandemic, as record numbers of adult children moved back home. In fact, sandwiched Americans are more likely to be supporting young adults than elderly parents. As of July 2020, 52% of 18 to 29-year-olds were living with their parents. 2

Helping to support your family members in their time of need requires planning and open communication between all generations.

Prioritize your retirement savings and create a financial plan

A financial plan encourages you to consider your pre and post-retirement goals. It examines your assets and liabilities and retirement savings. A plan will also require you to take a close look at your spending and what you think your cash flow needs will be during retirement. As a member of the Sandwich Generation, your plan will consider your additional family-related financial obligations. In addition, a financial stress test will help to keep you and your advisor accountable.

Set financial ground rules with your children and parents

Children: Discuss financial expectations with your kids and set boundaries and ground rules. Encouraging children to shoulder more of their expenses “reinforces good financial habits, self-sufficiency and provides direct experiential learning.” 3 The financial crisis and pandemic have been disruptive to the younger generation’s finances and careers. This has been an ideal backdrop for adult children and their parents to take a close look at their finances and learn from each other as they adjust to living together again. The stress of the last few years has made families think more about the future and has encouraged more openness when it comes to discussing finances. 4 As a parent. your support,

guidance and leading by example can help your children get their finances back on track. (and get them out of the house!)

Parents: Open lines of communication and transparency are key. “If you think you’ll become your parents’ caretaker in the future, start talking to them about their finances now. It may take years for parents to open up and accept your help.” 5  It will be essential to get a clear picture of your parent’s financial situation and what they have saved for retirement. A Net Worth statement will create a clear and consolidated picture of your parent’s assets and liabilities. It will also be important to learn the details of their Social Security, pension and investment income. These conversations should include information on your parent’s estate plan. Do they have wills, trusts, power of attorney for property and health care in place? These honest conversations will help to prepare all of you for what could be some difficult decisions ahead.

Meet with your Wealth Advisor

Let’s face it, these are stressful times and these additional financial responsibilities could affect your home life and retirement. An advisor can help you get organized and focused on preparing for your retirement. A net worth statement will create a clear picture of your assets and liabilities, where they are held and how they are titled. A financial plan takes things a step further and considers your spending and goals for retirement. When you make your retirement plan a priority, you will feel more confident in your decisions and in your ability to help loved ones during difficult times.

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

2 https://www.bbc.com/worklife/article/20210128-why-the-sandwich-generation-is-so-stressed-out

3  https://www.merrilledge.com/article/sandwiched-generation-caring-for-kids-and-parents

4  https://www.wsj.com/articles/financial-education-young-adults

5  https://www.nytimes.com/2020/02/11/parenting/sandwich-generation-costs.html?smid=em-share