Financial Tips For Sandwich Generation Caregivers

Financial Tips for Sandwich Generation Caregivers

Updated on Jul 16 2019


If you find yourself raising children while also caring for an aging parent, you are a member of the Sandwich Generation. Being a Sandwich Generation Caregiver is not only emotionally draining, it can also be financially draining. Learn more about balancing the financial demands of being a Sandwich Generation Caregiver.

The Financial Burden of Sandwich Generation Caregivers

First coined in the 1980s, the Sandwich Generation has grown exponentially since its naming. Today, 47 percent of adults between the ages of 40 through 50 who are raising children also have one parent who is 65 or older. An additional 15 percent of this group financially supports their children and their aging parents at the same time. The Sandwich Generation is expected to continue growing as Baby Boomers reach their senior years.

On average, caregivers spend $6,954 per year to support their aging loved one. For many caregivers, that is nearly 20 percent of their income. Add the expense of caring for young children, and the fact that many older adults are financially supporting adult children, and there’s not much left to save for the caregivers own financial future.

5 Financial Tips for Sandwich Generation Caregivers

How do you carry the financial burden of caring for two generations while securing retirement and a comfortable financial future for yourself? Here are 5 tips to financially survive being a Sandwich Generation caregiver.

1. Have open communication with aging parents about long-term care.

It’s not surprising that only half of baby boomers have talked with loved ones about medical treatment plans, end of life care, long-term care options, and paying for care. It’s important to have these conversations, awkward as it may be, so that you can understand the financial commitment you are facing as a caregiver.

For adults 65 and older there is a 70 percent chance of needing some type of long-term care. This can be financially traumatizing so it’s important to have conversations about what level care may be needed in the future, and explore ways to pay for that care.

2. Prioritize your own retirement savings.

As tempting as it may be to forego your own savings month to month, do not let your focus on your own financial future slip. You need to take care of yourself financially so that you can take care of others. If you do not plan your own financial future, you are only putting your children at risk of being the next generation of Sandwich Caregivers. Contribute enough to receive matching contributions from your company and avoid the temptation to empty retirement accounts to make ends meet today.

3. Organize your finances.

With so many commitments, obligations, and caregiving duties, Sandwich Generation Caregivers have very little time in the day to waste. Getting all financial accounts and assets organized can help you prepare for the financial future.

There are several financial apps that can help you get organized. Include your parents in this endeavor and know how you can access their important documents and estate planning documents in case of an emergency.

4. Consider college payment options.

College tuition weighs heavy on the mind of many Sandwich Generation Caregivers. As tuition and fees have increased significantly over the past few decades, it’s never too early to start thinking about paying for a child’s college education. Consider starting a 529 College Savings Plan or looking to community college to cover general education requirements for the first two years of college.

5. Seek professional advice.

The best way to ensure financial success for aging parents, caregivers, and the children of caregivers is to create a sustainable financial plan for all parties. And, the best way to do that is by employing the services of a financial expert. A financial expert can help you and your family proactively plan for the financial costs of caregiving for two generations while also creating an achievable retirement plan for yourself. They can help you set goals, understand what costs caregiving may require, and conduct an assessment that helps you understand where you are and where you want to go.

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