Know This…About Family

What’s on the Menu for the Sandwich Generation

Did you see this coming?  Most likely not.  When you were growing up, making your own way, building your career, and starting a family, did you think about this?

You’re now caring for your kids AND your parents.  

Most folks in their 40s and 50s planned for freedom as their own kids got older.  But those kids are finding a different world to navigate on their own, which makes it harder for them to branch off. And your parents need your help.  

If this is you, welcome to the “sandwich generation.”  

You may have thought that these years would be for you, for your retirement, and for each other.  But there is a lot more to it than you may have imagined.  Not only can it be a stressful time, but the decisions you make about money can have a long-ranging impact on your life and the rest of the family, young and old.  

Here are some things I know about what you need to know when it comes to your finances when you’re living the dream in between two slices of reality.

Communicate openly

One of the biggest financial pressures is handling the needs of two generations at once. This might mean paying for aging parents’ medical expenses or long-term care while also covering college tuition, extracurricular activities, or daily living costs for children. This will stretch you and your finances.  

What to Do: Have a budget that everyone is in on.  Communicate with your kids and your parents about money matters.  Let everyone know what the constraints are, and stick to them.  Your life is part of this, too, and it’s important to make sure everyone knows what the opportunities and limitations are.  

Guard your retirement

There may come a time when you’re tempted to tap into your retirement savings, sell off an asset, or even take a shortcut.  You may have to do it, but don’t do it without a plan.  

What to Do:  Dig deeper.  There are likely other ways to handle the issue.  You can save with better tax strategies, consider loans against assets, or even take advantage of little-known government options.  Find someone you trust to tell you the truth. Not just the truth that person wants you to know, but the truth for you.  There is usually a better way.  

Long-Term Care or College Costs

Wow!  That’s the impossible question, right?  Both are expensive, and both are perhaps necessary. Neither is always within your budget. 

What to Do: Again, don’t make decisions based on a blog post or an ad you see on TV.  Dig in for the truth from someone who will give you non-biased information.  There are insurance options, loan options, and even investment opportunities that can make the impossible seem possible.

Protecting Yourself

Insurance can do more than reduce risk.  And when used properly, it should.  You must protect yourself with life and/or disability insurance, but you also owe it to yourself to look for products that provide the best long-term options.  More importantly, you don’t want to spend money on insurance products that aren’t in your best interest or don’t provide the best return on your investment. 

What to Do: Find someone who knows.  An insurance agent may sell you a product he sells.  A trusted advisor will suggest what you most likely need.  There is a difference.  And someday, that difference could be a difference maker.

Taking care of your parents and your kids isn’t easy.  But you’re not alone.  And you’re not the first.  You won’t be the last.  Talk to someone you trust and plan ahead so that you know what you’re dealing with.  

James Collins is a Wealth Advisor and founder of Semper Fidelis Financial. To reach James, call or text 330-904-2593