Money: Understanding ‘the sandwich generation’


Claire Damgaard. PHOTO CREDIT: TH file

The sandwich generation is growing, and so are its responsibilities.

Across the United States, millions of middle-aged adults struggle with the dual responsibilities of raising a child and caring for an aging parent. They are members of what is commonly called “the sandwich generation.”

In fact, a 2018 Pew Research Center analysis of Bureau of Labor Statistics data found that 29% of adults have a child younger than 18 at home, and 12% of parents with a child at home provide unpaid care for an adult as well.

The rise of “the sandwich generation” is a byproduct of two powerful trends: Women giving birth later in life and the increasing longevity of the U.S. population. When you combine these factors with a growing number of young adults living with their parents, it’s easy to see why so many middle-aged Americans are concerned about the future.

If you are one of them, here are a few steps you can take to protect your loved ones and prepare for the financial responsibilities ahead:

Have a plan for elder care

Talk to your parents about the kind of care they’d prefer, and discuss it with your siblings. See which, if any, family members have the capacity to help provide care and which home would be the most accessible. In case external help is needed, research local resources to see what is available — and at what cost. Most importantly, consult an attorney and make sure you have all the legal documents needed to make sudden medical and financial decisions if the need arises.

Evaluate your resources

Before determining a course of action, make sure you know what resources are available. Can your parents pay for care? Do they have long-term care insurance? Do they own any whole life insurance policies with living benefits that they might be able to use to pay for care? Can other family members contribute financially? Is public assistance a viable option?

Protect your children’s lifestyle and future

While caring for a parent is a huge responsibility, it’s important to make sure your children’s needs and your retirement needs are met. If you haven’t done so already, set up a college fund and make funding it a priority. If your place of employment offers a 401(k), try to contribute the maximum amount allowable, and make sure you contribute at least enough to get the full company match. Also, consider purchasing a term or whole life insurance policy that can help to protect your family’s future in case anything tragic happens to you.

Caring for children and aging relatives at the same time is never easy, but with the right planning and resources, it is possible to do both. With so many people joining the ranks of the sandwich generation, now’s the time to start planning for the future.

Claire Damgaard is an agent with New York Life Insurance Company in Dubuque.

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