Financial Advice for the Sandwich Generation

Members of the Sandwich Generation are raising and supporting children while also caring for aging parents. While this is an increasingly common experience, the emotional and financial toll on these individuals is unique to every situation.

The financial burden is top of mind for me, both as a financial advisor to clients in the Sandwich Generation and as someone who might join their ranks in the future. My parents are quasi-retired and helping provide care for my father’s parents. While I see the process play out, I consider my own preparedness to help provide care for them one day while I have children still dependent on me.

Whether you are a caregiver, or expect to be one soon, you might wonder: Do my parents have the resources to support themselves? If they don’t, do I have the resources to support them while also saving for my own financial goals like retirement and my children’s education? How do I juggle these competing priorities?

While every situation is different and influenced by family circumstances, dynamics, and preferences, I advise clients in the Sandwich Generation to start by hosting an open dialogue as a family. As necessary, include trusted professionals like financial advisors, insurance agents and attorneys in the conversation to help ensure all of your bases are covered.

I recommend starting by addressing the following questions:

  1. What is the current cost of care for your parents? How might that change over time?
  2. Do they have healthcare benefits from an employer or otherwise?
  3. Have you reviewed their eligibility for government benefits such as Social Security, Medicare and Medicaid?
  4. Who is managing the coordination of benefits?
  5. Do they have a pension, 401(k) or other retirement assets?
  6. Where are their non-retirement assets, and how are they accessed?
  7. Which family members are positioned to lend financial support, if necessary?
  8. Who is empowered to make financial and healthcare decisions if your parents are unable to do so?

Answering these questions will help your family see the full financial picture. Even more importantly, it will help you—the caregiver or soon-to-be caregiver—develop or evolve your own financial goals, with the caregiving situation in mind, and design an investment plan to achieve them. My best advice is to save early, save often, and take a goals-based approach to planning for your future. When crafting your plan, if possible, focus first on your immediate family—college, retirement and any other essential goals—and then address the needs of your parents.

The Sandwich Generation faces complex challenges, but by involving your entire family, asking the right questions, identifying your goals, and developing an investment plan designed to achieve them, you will be well positioned to give your parents and immediate family the support they need and deserve.