Feel Like a Sandwich?
When you prepare for retirement, you generally plan for your own financial situation. You work hard to save for the lifestyle you wish to enjoy during the next phase of your life – a phase that you likely imagine to be free of financial obligation to anyone other than yourself.
Unfortunately, as many baby boomers are realizing, this is not always the case. A large number of boomers now find themselves to be members of what is known as the Sandwich Generation. The Sandwich Generation is comprised of those caring for aging parents, while also supporting their children. Providing support to your family is something that many people not only feel is an obligation, but is something they truly want to do. While their intentions are honorable, without proper planning, providing assistance can come with a physical, emotional and financial price.
Caring For Those That Cared For Us
As our parents age and the cost of health care rapidly increases, it is human nature to want to assist them in any way you can. This help can take various forms. It can be as simple as calling them on a daily basis to check in. Or it can involve much more time- and money-consuming efforts such as increased traveling, remodeling your home to accommodate an ailing parent, or making payments to an assisted living facility.
All of these efforts, from the simplest to the more challenging, involve your time and often your money. It can result in increased time off and lost wages, which can lead to reduced savings toward your long term plans. It can even force you in to early retirement. All of these issues lead us to various solutions that begin with something as easy as just talking to your parents. Find out about their financial situation. Do they have long term care insurance? If not, do they have the assets to support any care they might need? Do they have the documents in place that allow you to make decisions when they are unable, such as a durable or health care power of attorney? To view this from a different angle, if something were to happen to you, is there someone else to take your place to provide the care your parents need? If they are depending on your financial support, are the assets you leave behind enough to provide for them, as well as your spouse and children? Knowing these answers in advance, and planning around them, can make this situation less of a burden and more of a way to give back to the parents that loved and cared for you.
Assisting your children does not stop when they reach 18 anymore. More and more children are becoming Boomerang Children, meaning that even into adulthood, they are returning home to live with their parents. Divorce, prolonged education, job loss – these are just a few reasons that an increasing number of young adults decide to make this change.
You love your children and want to assist them in any way you can, but what consequences accompany that support – additional residents in your home, cramped space, increased utility bills, providing day care for your grandchildren? Or maybe your children are not Boomerangs, but they are teenagers for whom you are constantly transporting from one school function to another. Add these challenges to caring for an aging parent and you have a potentially stressful situation. Aside from placing your retirement plans at risk, such a circumstance can impair your physical and mental health as well.
What Does This Mean to You?
If financially supporting your family is a possibility in your future, retirement preparation means planning for more than yourself. It means making sure the proper plans are in place for you to not only take care of yourself, but to make it easier for you to take care of others when the time presents itself. As advisors, we will do our best to understand your family tree and the planning opportunities that may occur along the way. However, feel free to come to us with any other issues that may surface, even if you feel it may not pertain directly to your finances. You may find that it could affect your long term plans in more ways than you can imagine.