What’s in a Sandwich? Thriving as a Member of the Sandwich Generation

1- What's in a Sandwich_ {Header Image}If your family has multiple generations involved, your priorities could include grown children, grandchildren, and elderly parents. Maybe you live in a multi-generational household or visit your in-laws a few times a week with groceries and a helping hand.

Have you ever struggled to balance everyone’s needs? Well then, you could just be a member of the Sandwich Generation.

You’re not alone: more and more middle-aged adults are providing emotional, financial, and practical support to their entire families.

Their biggest issues? Time and money are often at the top of the list. Here are a few tips for managing both – without sacrificing the big picture priorities that really matter to you.

Consider pooling your resources.

For some families, it can be helpful to look at financial and other resources collectively. After all, everyone can bring something to the table, and the reality of Sandwich Generation life is that many of your resources are going to be shared anyway.

To that end, sit down together to see how you can best use time and money to the benefit of everyone.

For example:

  • An older grandparent who has extra time (and energy!) might take on babysitting to save money on childcare
  • Maybe you could pool your grocery shopping budgets and buy in bulk
  • An adult child living at home could contribute to household expenses or offer a helping hand, like making dinner a few times a week or cleaning

If you can get creative and work together, sharing time and money could help make your multi-generational life more efficient – and more cost effective.

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Establish some ground rules

Many Sandwich Generation members find it extraordinarily hard to prioritize their financial needs. Between countless competing priorities and wanting the best for your loved ones, it’s easy to put off issues like saving for retirement or getting a handle on debt.

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But putting off your financial future is a great way to start heading down a path of financial instability.

Instead, take some time to prioritize your own finances and establish some specific ground rules for where your money goes.

For example, you could:

  • Set up an automatic contribution of an extra $100 every month to your savings account
  • Use a specific amount of cash for non-essential purchases – when you run out, you run out
  • If you have high-interest or credit card debt, tackle it. What do you need to pay towards your debt, and how can you adjust your finances to make it happen?

Then, communicate these priorities and needs so that everyone knows where you stand and what you’re prepared to contribute – or not.

Get some tax insights

Depending on the specifics of your situation, you could be eligible for tax deductions or an advantageous tax status.

For example, if you provide significant support to a family member who has a limited income, you might be able to claim him or her as a dependent.

In some cases this could generate significant tax savings for you each year. Generally speaking, the dependent has to live in the US, rely on you for more than half their income, and cannot file a joint tax return or earn more than a nominal amount of money each year. 1

Consider speaking to a qualified tax accountant to learn more about this and other potential deductions.

Think through future needs

It’s a difficult reality to face, but 70% of seniors will require long-term care at some point in their lives. 2 That could mean anything from a short stay after a routine operation to lengthy and comprehensive end-of-life care.

As you can imagine, anything towards the latter end of the spectrum can be very costly – both emotionally and financially. That can make it tempting to avoid the issue. But instead of hoping it doesn’t happen, it’s better to be prepared.

Would you be ready for a long-term care stay? Think about:

  • What emergency financial assets you have in place
  • What kind of health coverage your elderly family members have – where are the gaps and what would require a financial contribution from your family? Would additional coverage make sense?
  • What kind of living arrangements might you consider if someone needed dedicated care? Sometimes having an elderly parent live at home can save on both financial and emotional costs. However, this doesn’t always work for everybody.

These issues are intensely personal and vary widely between families. That’s why it’s so important to have an honest and open dialogue about these matters with your loved ones.

Finally, don’t forget to take time out

This is the kind of advice that makes people roll their eyes, but it is so important! When you’re responsible for helping to support multiple generations, you’re at greater risk of forgetting to support yourself.

This isn’t just about money, and it isn’t just about time: it’s about having the emotional bandwidth and energy to stay on top of your very busy life. Whether it’s asking for babysitting help so you can get to the gym regularly or simply curling up to watch a favorite movie, do make sure to plan time for you.

Whatever can help you recharge and refuel will also help you make the best strategic decisions for your family.

Looking for more?

Our free eBook series on Sandwich Generation finances offers help with planning, guidance, and support for members of the Sandwich Generation. Covering everything from tax tips to lifestyle advice, you’ll get access to a lot of information in an easy-to-read downloadable format. Click here to download your copy today!

Let Us Help!

We can discuss this topic and more at a complimentary appointment. As a bay area retirement financial advisor, we can give you a review and make suggestions based on your retirement objectives.

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1 For more information, please see: https://www.agingcare.com/Articles/claim-elderly-parent-as-dependent-109238.htm

2 US Department of Health and Human Services: http://longtermcare.gov/the-basics/

Important disclosures

The opinions voiced in this article are for general information only. They are not intended to provide specific advice or recommendations for any individual and do not constitute an endorsement by NPC.

To determine which investments may be appropriate for you, consult with your financial professional. Please remember that investment decisions should be based on an individual’s goals, time horizon, and tolerance for risk.

Neither diversification nor asset allocation can ensure a profit or prevention of loss in times of declining values. NPC does not render tax advice.

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