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Sandwich generation, you may feel you've lost control of your financial kingdom

Sandwich generation, you may feel you've lost control of your financial kingdom

August 23, 2022

If you're part of the "sandwich" generation, you may feel you've lost control of your financial kingdom.

"Many of us in the sandwich generation toss and turn at night wondering if we'll manage to stay in control of our financial kingdoms." By Jerry Yu

If you're like me, you may fall into a category known as the "sandwich" generation. It's a term that describes people who still have children at home or college but also find themselves with elderly parents who need their time, attention, and sometimes financial assistance.

While, in most ways, it's fantastic to grow old with your mom and dad, maybe even your grandparents, it's also challenging. Often, the sandwich generation ends up putting off their retirement plans as they work hard to solve everything from paying for their children's educations to financing nursing home care for their elderly parents.

Instead of focusing on your own inevitable retirement challenges, you may have restless nights asking yourself questions such as "Are mom and dad prepared for a potential health crisis?" "Is their estate in order, and will I be able to find all the necessary paperwork? "Do my parents have money set aside for emergencies?" "Are other family members prepared to step in and assist me as my parents get older?" "Will mom and dad be able to age in place, or will they need to live with me or in an assisted living facility?

These and other questions weigh heavily on the minds of many in the sandwich generation because they realize that their retirements are just around the corner and may not be adequately prepared.

Answering those questions NOW is essential.

For many of us sandwich generation folks, preparation is a dirty word. The planning process often feels like an exercise in futility, especially since there is no sure way to know precisely how long our parents or we will live. After all, we live in a world that's always in flux, volatile and chaotic.  

I believe, however, that what's required is a change in mindset. Instead of viewing planning as something you do once, set in stone, and then forget about, try and see it as organic, dynamic, and ultimately subject to modification. To paraphrase a quote I once read, "Hold all things loosely." Be ready and willing to pivot as your understanding and circumstances change, and make revisions as needed. This attitude will benefit you later when life hurls those hardballs at your head.

Here are a few steps you can take NOW to equip yourself better to handle the challenges of being in the sandwich generation.

It's time to have "the talk." Remember when you were a teen or pre-teen, and your parents had "The Talk" with you? You probably rolled your eyes and sighed because you believed you knew everything already, right? I'm guessing that talk wasn't about finances but birds and bees.

Well, guess what? You need to have The Talk About Money with your parents, who will also push back. Expect them to resist your attempts to determine whether or not they have their act together. They probably don't.

Believe it or not, The Talk about Money may be more embarrassing for your parents than the birds and bees discussion. Older generations often feel that talking about money is gauche or tacky. Or, they can have trouble admitting they haven't handled their finances well or have much more money than they've been letting on. If you have siblings, your parents may not want you to know how they've divided their assets or whom they've chosen as the executor of their estate.

But, you can't let any of these objections sway you from your task of determining where things are right now. Until you know the starting point, you cannot map out any strategy to get to the finish line. Insist on having a meeting with your parents and siblings. Explain why they must do this, especially if they want to ensure they don't wind up with a miserable, stress-filled retirement. Be sure you have a list of essential questions ready. If your parents are comfortable with it, recording your Q&A session can be extremely useful.

Help your parents put together a transition team. Whether your parents own a business or work for someone else, transitioning into retirement can be one of the most difficult things they will ever do.

Many things change when you no longer work, and there are a plethora of decisions you must make, often quickly. Unfortunately, it's easy to make mistakes. A team of trusted experts, even those with limited assets and resources, is essential to help avoid such errors.

Your parents need at least a basic estate plan with a will, family trust, power of attorney, and other essential documents. An estate planner can help you understand exactly what you need for a smoother transition. It would help if you also found a retirement advisor with the specialized knowledge and skills to take what your folks have saved and turn it into income. Other members of the retirement transition team might include:

  • A CPA or other tax expert.
  • A long-term care specialist.
  • A "death planning" consultant.

The point is that DIY retirement planning is fraught with perils and pitfalls. Engaging skilled, reliable experts to assist you makes a lot more sense.

These are just two things you can do right now, even if your parents are still working, while they are in good health. My books, "Defend Your Financial Kingdom" and "Fortify Your Financial Kingdom," will give you even more ideas to help offset life's challenges in the sandwich generation.

Go here and request a copy today.