Financial Considerations for the Sandwich Generation

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By Dave Hardin, President of Hardin Financial Group

The Sandwiched Generation may be the most stressed out generation alive today. It is not easy taking care of mom or dad and your kids and perhaps grandkids all at the same time, often under the same roof and holding down a job at the same time.  If that were not enough, throw in the added stress of managing additional finances and dealing with extra costs and financial concerns to boot. Let’s take a look at some of the biggest concerns looming over “Sandwicher’s” in regards to finances and the perils that surround this squeezed in generation.

Job issues: It is no surprise that the lion’s share of the burden for this generation falls squarely on the wife in the family. It rarely matters whether the parents being cared for are hers or her husbands. Often we can see her career take a serious hit during this period. Lots of time off can affect the take home pay at a critical time as the families expenses can rise significantly with the added burden.

It is not unheard of to see women take sabbaticals or even resign from their position because of family responsibilities during this squeeze. It is important to let your boss know what is going on, especially if you intend to continue your career. Have a heart to heart discussion and don’t be afraid to ask for some flexibility with hours and your schedule. If they value you, they may be willing to accommodate your needs. After all, you are probably not the first employee to find themselves in the middle of two generations under one roof.

Retirement Funding: Don’t forget that your retirement is right around the corner. Many don’t really beef up their retirement savings until they have reached their fifties. If you find yourself in the sandwich squeeze at that time, make sure you put a priority on saving for your own golden years. Expenses might be up and it is easy to tell yourself that this situation won’t last long, but don’t fool yourself. This could last for years and retirement savings are hard to catch up. If your employer is matching your contributions to a retirement account make sure you contribute whatever you need to get their maximum match.

Extra costs: Food, water, gas, electricity and car expenses are all going to increase. That car is going to have extra wear and tear, more oil changes and repairs. Do not be hesitant to ask mom or dad, son or daughter to pitch in. Groceries alone could be an extra 5 to 7 thousand dollars a year. It is easily overlooked for a week or so, but this conversation should happen upfront in order to lessen the financial burden and have everyone understand that you do not have unlimited funds. An agreement in place, upfront, will save feelings and finances later on. If mom or dad have something that they are passing down to the next generation and you have siblings, discuss the costs of care, room and board with them now – not after your parents are gone. This might save your relationship. I can already see those reading this saying not my family, but trust me, this step is worth the effort.

Housing: you may have been planning to downsize as part of your retirement plan. That may be out the window. Take a hard look at your home and reassess what you plan to do. If you had planned, as many do, to downsize in retirement, what are your options? Can you afford to stay where you are after you retire? If the market is off, what can you do then? If you are unclear about how to handle the different possible scenarios, get with a retirement planner and have a serious conversation about your plans and options.

Postponing your retirement: It may have become financially impossible to retire while caring for kids and parents at the same time. Don’t assume that you have a magic date or age to retire. If your costs have changed, make sure you have looked at your plan and adjusted to your current circumstances. Take time to meet with a professional retirement planner or a distribution specialist who can help you navigate through the sandwich squeeze you’re in.

Getting Help:  Being a care taker is a very stressful and difficult job.  You need to take care of yourself and take care of your marriage in this tough time.  Hiring extra help for housecleaning and some “elder sitting” can help you keep your spirits up and keep your spouse feeling important when there are so many pulls on your time, attention and finances. 

It warrants me mentioning that as your children come back home and you welcome them with open arms, discuss quickly what the planned timeframe for the stay is. Taking the time upfront to set financial expectations and a time goal for them to move out will make the stay so much better for all.  Having this discussion up front avoids a difficult discussion down the road with them and you.

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