Entrees For The "Sandwich Generation"
Bob and Marcy Tannenbaum both have hectic lifestyles. Bob, who is 45, works in the city for a public relations firm. He commutes from the suburbs each day. Marcy, who is employed closer to home, is the director of a nonprofit organization. She’ll turn 43 before the end of the year. They’re making ends meet, but haven’t set aside nearly as much as they’d like for their future needs.
The couple’s three children are 15, 12, and eight. Getting them to soccer practices, dance recitals, and religious-education sessions keeps their parents hopping—especially Marcy, who bears the brunt of the carpooling.
As if things weren’t complicated enough, Bob received a panicky phone call last week from his mother. Bob’s 70-year-old father had been hospitalized after taking a spill. His mother wanted Bob to come “home” immediately, but “home” is 1,000 miles away. And he can’t just leave his family and job behind—not to mention the economic ramifications if he did.
This kind of scenario is all too familiar to those stuck in the middle of helping elderly parents and raising their own children. These people have come to be known collectively as the “sandwich generation.” And if you’re not careful in these situations, the challenges can swallow you.
Nevertheless, you may be able to minimize potential problems with advance planning. Consider these four basic steps:
1. Get all the facts. Job one is to avoid unpleasant surprises. Talk to your parents about their financial situation and their plans if they become ill or incapacitated. At the same time, examine your own finances. If you haven’t already done so, figure out how much you’ll need to save for retirement and college for the kids. What will you have left for emergencies?
2. Seek “the power.” In case of a dire emergency, you’ll have to act fast on behalf of your parents. The best approach is to have a durable power of attorney in place. This allows you to make decisions regarding their financial considerations. For more protection, supplement a power of attorney with a health-care proxy and a living will relating to medical decisions.
3. Face up to long-term needs. The cost of an extended stay at an assisted-living facility or nursing home can be a financial back-breaker for families. Check to see what coverage, if any, your parents would receive from long-term care insurance. If they don’t have policies, examine your options. Of course, the longer someone waits to buy such a policy, the more it will cost per year.
4. Don’t forget about yourself. As much as you want to help your parents, you can’t ignore your own needs. It usually doesn’t make sense to erode a college savings or retirement fund to support your parents. Stick to your priorities and develop a plan that incorporates all of these factors.
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