As members of the Sandwich Generation know all too well, being in the middle can not only put a squeeze on your time, it can impact your finances, as well. If you are caring for your aging parents and your children all at the same time, you are part of a growing group of middle-aged adults known as “The Sandwich Generation.” These dueling demands can also come with added financial responsibilities, as well.
According to a 2013 Pew Foundation survey, 15% of middle-aged adults are supporting their parents and children at the same time. Caring for not only your own children, but your aging parents who may have special needs can certainly put a sizeable dent in planning for your financial future. With that in mind, it’s important to make a sound plan for your future and your family’s future now.
Aging Parent’s Finances
One of the most difficult steps in the planning process to have a conversation about finances. For most individuals, this is typically a very private matter. While money is not always the first topic to address, it is important to do so. Having a clear understanding of your parent’s finances will allow you to determine what your future responsibilities might be as well as whether there are programs they may be eligible for and other income-based options. In addition, knowing where your parents stand financially will allow for a more open, inclusive conversation about pending care and financial responsibilities with the rest of your family.
Planning Your Aging Parent Financial Checklist
Before you sit down with your parents to talk about what care options may be required at some point and whether they prepared financially for these steps, it is best to have a checklist handy so you know which questions you must be answered. This checklist might include some of the following:
- What plans have you made or thought about regarding your needs as you age? Express your desire to avoid last minute, rushed decisions which may not be in their best interest.
- Would they be open to having a planning session with you?
- Know where they keep their documentation for items such as insurance policies, retirement plans, and bank accounts.
- Have them give you a list of names, addresses, and phone numbers for their doctors, accountants, and any other professional they work with.
- Explain to them that it would be wise for you to have copies of their estate planning information, their Power of Attorney documents, Advance Directives, and a copy of their will.
Unfortunately, when it comes to your aging parent’s financial planning, part of your responsibility may include guarding them against fraud. As noted by the North American Securities Administrators Association (NASAA), elderly adults are often targets and victims of investor fraud and sales fraud. Educating your parents can go a long way to preventing this from happening, but having a legal power of attorney that covers financial matters can help as well.
Dealing with Your Own Finances
Not only will you need to have a handle on your parent’s finances, you will need to plan your own. If some of your aging parent’s financial burdens will be added to your own, you may have to make some difficult choices to ensure you have retirement funds set aside for yourself. Just as you prepared for your discussion with your parents, prepare for a discussion with your own family about what plans are in place, which may need to be adjusted, and what additional actions are necessary to secure your future. You may want to consult a Certified Senior Advisor about who you should talk with to complete your plans.
Sometimes, life doesn’t work out the way you thought it would, but being there for your parents and children comes with a lot of positives, as well as responsibilities. With a little planning, the involvement of all parties, and open dialogue, you have a much better chance to successfully balance the needs of your family members and those of your parents.
For more information, please review our Sandwich Generation Resources.
How do you handle being a member of the sandwich generation? Tell us in the comments below.