Financial Planning – Sandwich Generation

If you are a Baby Boomer or a Gen X’er, chances are you are feeling the squeeze between your kids and your parents/your grandparents. If it provides any comfort, you are not alone. It is estimated that there are 15 to 24 million adult-child caregivers in the United States today. Two-thirds of the adult-child caregivers are women, many of whom are in the workforce trying to juggle it all. The demands and stress are daunting. You are pushed to the limits of your time, your money, your marriage, your friendships, your personal health and well-being. Moreover, you feel the emotional weight of multi-generational needs and concerns. We empathize with the constant effort to manage everyone’s expectations which are often conflicting. We’d like to offer you some thoughts to consider that we hope you’ll find helpful.

Take care of yourself
We have all heard the pre-flight instructions, “…make sure to put the oxygen mask on yourself first before attempting to help someone else put on theirs.” This goes, too, for your emotional, physical, spiritual and financial well-being. Are you skipping meals? Are you eating nutritional meals and staying hydrated? Do you make time to get adequate exercise and sleep? When was the last time you spent a relaxing time with your friends or simply engaged in a fun activity? All the usual tips for help with stress management apply here.

Seek assistance with the caregiving to avoid stress and burnout. Can your siblings or extended family help? Can they take over while you go on a get-away? Rough statistics show that 30% of caregivers die BEFORE those they are caring for die. Common illnesses include auto-immune diseases and depression. You don’t want to become a statistic, yourself. It’s more than okay to ask for help. So ask.

When was the last time you updated your financial plan? Are you still on track? Have you implemented the adjustments to your plan? Financially speaking, make sure your personal financial situation is on solid ground. Make it a priority to keep saving and continue contributing to your retirement plans — especially if your employer has a matching policy.

Seek financial advice if you find yourself choosing to go part-time. Taking time off for caregiving is an important reason to have a good emergency reserve fund. MetLife has done a study of caregiving costs to caregivers. Financially, the cost impact on female caregivers (age 50+), in terms of lost wages, pensions and social security benefits equals $324,044. For men (age 50+), the cost impact is $303,880. Simply put, it is too expensive to not have a plan.

Your kids — young and young adults
Once you have established your own financial needs for retirement, you can focus on your children’s college education [be sure to visit our site, or contact your advisor to study the many options for saving for college].

How about the adult kids that move back home with you. Did you and your spouse have plans of downsizing and focusing on each other as empty-nesters? Is it smart to be financially supporting them? There are several reasons why many adult children are moving back home. The two biggest factors are the current economic climate and a challenging job market. This situation requires communication and clear expectations for how long the arrangement will last and what are the “house rules.” Use this time to discuss budgets, expenses, life lessons, daily expectations. Important here is to avoid slipping back into old adolescent routines and behavior. Here is a great resource to help you with adult children moving back in: http://www.allprodad.com/10-guidelines-when-a-young-adult-child-moves-home/

Communicate with your parents and become more informed
Have your parents thought out or planned for their advanced years? Having this discussion with your parents can be very helpful. This conversation can happen as early as or prior to their retiring. Some questions to ask include:
What is their vision for their future, their financial resources, and any plans they have put in place for care?

Do your parents want to downsize or age in place? Is the home safe to age in?

Do they have a long term care insurance policy? Are there enough assets to pay out-of-pocket for custodial care in the home? Are they financially okay? [Custodial care is non-medical care that helps with activities of daily living: preparation of meals, medicine management, assistance with dressing, bathing, etc.]

Are their legal documents up to date? For instance, Florida has updated and revised their Durable power of attorney statute which became effective October 2011. This document is especially important if cognitive impairment develops.

Consider consulting with a geriatric care professional also known as an aging life care professional. They are educated and experienced in the several fields related to aging life care/care management, including, but not limited to nursing, gerontology, social work, or psychology, with a specialized focus on issues related to aging and elder care. The individual’s independence is encouraged while safety and security concerns are addressed. They also have knowledge about the costs, quality, and availability of resources in their communities. Their website www.aginglifecare.org has a lot of helpful information and a search directory for a professional near you.

Our parents’ generation values self-reliance so they are not accustomed to asking for help — if they even acknowledge that they need it. While this subject matter is difficult, not having these discussions can make things more difficult. It’s a family matter, so involving your spouse and kids, your siblings and extended family, to help is important since caring for parents may impact your own family’s budget and time commitments.

Life is happening, shouldn’t your financial plan be happening also? Talk to your Allgen advisor. We’re here for you.

*Written by Ana Fernandez, CFP® and Teresa Talton, CFP® Candidate with Allgen Financial Services, Inc. Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, Certified Financial Planner™ and CFP® in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.