Financial Tips for the Sandwich Generation

If you are caring for young children and aging parents, you are part of the sandwich generation. Developing a financial plan for your parents,
your children, and yourself will help you navigate the challenges you face.

A Retirement Income Plan for Your Parents

It’s time to have a serious money talk with your parents. In addition to understanding their wishes
for medical treatment and long-term care, you should also understand if they have adequate retirement income.

Research Long-Term Care Options

You should research ways to pay for long-term care if your parents need it. If your parents are in good health and still relatively young, they may want to consider purchasing a policy before it
becomes cost-prohibitive.

Prepare an Estate Plan

If your parents do not have an estate plan, it’s
time to create one so that their wishes are met. Help them through this process, or find someone who can, including establishing a will, trust, advanced healthcare directives, and medical and durable powers of attorney.

Inventory Assets

Help get your parents’ financial assets in order by locating all important documents, including financial accounts, retirement accounts, wills, trusts, medical directives, powers of attorney, and digital assets.

Develop a College Savings Plan

As you switch the financial focus from your  parents to your children, start by planning for their largest expense: their college educations. In addition to college savings, you should help your children plan for their life after high school. Engage your children in this process by having them research scholarships, grants, and work-study programs to assist with college expenses.

Your Turn

Because you are sandwiched between your parents and children and taking care of their needs, you may not have developed your own
financial plan. It is important that you take the time to put yourself first and get your own financial house in order.

Creating a financial plan with long- and short-term goals will give you peace of mind that your own financial life is on track. Once it is created, it will give you more time for the other competing priorities in your life.

When Adult Children Return Home

Adult children return home to live for a variety of reasons — they can’t find a job, they have too much debt to afford living alone, or they have divorced and need financial support. Use the situation to help reinforce basic financial concepts:

Set a time frame. Don’t let your child move in for an open-ended time period. Financial goals should be set and followed, so your child is working toward financial independence.

Charge rent. There are increased costs when your child returns home. Although you don’t have to charge a market rental rate, you should charge something. If you’re uncomfortable taking money from your child, put the rent money aside in a separate account and use it to help your child when he/she moves out. Also decide which chores your child is expected to perform.

Put your agreement in writing.  While putting everything in writing may seem too businesslike,
it gives you an opportunity to clearly spell out your expectations and the rules of the house. This can prevent future misunderstandings.

If you would like more information or to discuss your financial concerns

Financial Thoughts

Financial literacy scores rise during adulthood for accredited investors and begin declining after age 60, while financial literacy scores for non-accredited
investors are constant from young adulthood through middle age and decline after age 60. An accredited investor is one with an annual income over $200,000 ($300,000 for a married couple) or a net worth over $1 million excluding primary residences. (Source: AAII Journal, November 2019).

Approximately 25% of Americans receive financial planning assistance (Source: TD Ameritrade Institutional, 2019).

A recent study found that 43% of clients prefer human assistance over automation for daily financial activities, while 86% prefer brands that make it easy to
reach a real person (Source: Charles Schwab, 2019).

About 63% of consumers expect to conduct more of their financial business online within the next five years (Source: UMRA and Ernst & Young, 2019).

Approximately 51% of non-retired Americans project that they will be financially comfortable during retirement (Source: Gallup, 2019).

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Copyright © 2020. Some articles in this newsletter were prepared by Integrated Concepts, a separate, non-affiliated business entity. This newsletter intends to offer factual and up-to-date information on the subjects discussed but should not be regarded as a complete analysis of these subjects. Professional advisers should be consulted before implementing any options presented. No party assumes liability for any loss or damage resulting from errors or omissions or reliance on or use of this material.