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Caring For Aging Parents: The Sandwich Generation Thumbnail

Caring For Aging Parents: The Sandwich Generation

You spent two decades of your life raising your children to prepare them to go out into the world on their own. The hope was when the kids were out of the house you are doing things you wanted to do in life. Perhaps it was more traveling, going back to work or simply having more time to yourself.

However, today you find yourself having the dual challenges of helping your adult children launch their lives while having the equally difficult challenge of caring for your aging parents. If this is you, you are not alone. You are part of the Sandwich generation.

As if planning for your own retirement weren’t enough, you are stuck between the needs of helping your adult children launch into the world and taking care of your aging parents as they are winding down.

You may be faced with challenges of helping your adult children land good jobs and start their careers while paying off student loan debt.

Once your kids do enter the workforce, make sure to have conversations about the importance of saving via their employer sponsored 401(k) plans. Roth IRA‘s are also good savings vehicles for this group of younger workers. Make sure to emphasize the compounding effect on money and the exponential growth that happens when your adult child takes advantage of their greatest asset: time. Time in the market is their ally.

On the other end of the spectrum, you have your aging parents to contend with. Some challenges you may be facing include where they are going to live as they age and start to slow down physically. What happens when the first parent dies? How does the survivor cope?

The rising cost of healthcare may be putting a squeeze on your own ability to properly save for retirement. Click here

You also have to watch out for cognitive issues. Alzheimer’s and dementia are more prevalent today than ever before. This can be an awkward subject to discuss with your parents. For signs that your parent might have dementia click here. Alzheimer’s is a similar challenge. Click here for some guidance in determining if your parent may be suffering from Alzheimer’s.

Some things you can do to prepare for the aging process for your parents include:

  • Find out if mom and dad have long-term care insurance policies in force. If they do, ask for a copy of the policy and find out such details as the daily benefit amount, the annual premium, the length of coverage (One year, three years, five years for example) whether there is a cost-of-living adjustment on the policy. Roughly 75% of Americans are going to need some sort of long-term care assistance. The average stay in a facility is 2.5 years for men and three years for women. The average cost of long-term care in a skilled nursing facility is nearly $8,000 per month. Having long-term care insurance can be a great benefit for your parents.
  • Make sure to find out details about your parent’s life insurance policies. This can be easier said than done as this generation does not like to talk about finances. However, having an understanding of your parents’ insurance coverage can greatly help you as their advocate.
  • Make sure your parents have a living trust in place. Find out their wishes around medical issues. For example, do they have a “do not resuscitate (DNR)” in place? Have they chosen a medical power of attorney? Do they have a durable power of attorney to help them make financial and other decisions as they age?
  • If your parents are open about their finances, it can be helpful to find out who they’ve named as beneficiaries on their investment accounts. Also, making sure they have properly registered their accounts is important as well. All taxable accounts should be registered in the name of their trust. The house should also be registered in the name of their trust. These are common mistakes people often make when they overlook the details. This is where you can really help your parents’ financial situation. Asking good questions is a way to open the door in this area.
  • Another consideration is the beneficiary selection in the event one or both of your parents is remarried. For example, if your father remarried and has titled his investment accounts jointly, upon his passing the assets will go to his new wife. This may or may not be your father‘s intention and understanding the way your parents have titled their accounts can help you to coach them on proper estate planning. There are many unintended consequences for improperly titling accounts.
  • You should help your parents review the beneficiary designation on their life insurance policies and IRAs. Beneficiary selection on these types of accounts is binding so if they’ve named the wrong person this can have severe consequences and cannot be changed after their death. Thorough review of their beneficiaries is a smart thing to do.

Elder abuse is fairly common amongst our senior population. Having conversations and regularly reviewing your parents’ financial affairs can go a long way to helping prevent elder abuse from happening to them by a smooth-talking salesperson. To learn more about this issue click here.

Watching your parents age is never a fun process. Doing so while trying to launch an adult child into the workforce can be emotionally taxing and make you feel spread too  thin. For some additional resources to assist you on the journey click here.

If you find yourself in a similar situation and have questions or concerns, please do not hesitate to contact our office. We are happy to help you navigate this challenging season in your life.