By: Thomas Furda, CFP®
Advisor, Financial Life Focus
Debbie and Mike were feeling pressure from all sides.
“I’m not sure we’ve saved enough to pay for our children’s college tuition. My parents paid my way and I want to do the same for Jackie and Max.” Debbie started anxiously.
“It’s not easy saving for retirement and the kids’ college,” Mike said with a frown.
“I’m worried about my parents outliving their resources. I’m their only child and want to help them,” he added.
Debbie and Mike are members of the ‘Sandwich Generation’.
The ‘Sandwich Generation’ are middle-aged adults who are caring for children and have aging parents.
According to a Pew research study, nearly one-half of adults aged 40-60 are supporting a child and have a parent aged 65 or older. That makes over 45 million ‘sandwiched’ adults and growing.
As we live longer, and young adults struggle to achieve financial independence, members of the ‘Sandwich Generation’ may find themselves caught between the demands of raising children and caring for their aging parents. Considerations about helping family members, which ones and to what extent, can lead to insecurity and strain relationships that are important to us.
I asked Debbie and Mike whether they spoke about their concerns before.
“Not really, it’s a hard topic to raise.” Debbie said.
I told Debbie and Mike to write down their priorities and talk about them. Through the process of thought, discovery and conversation they could come up with an agreed-upon strategy.
After 20 minutes of thoughtful consideration I asked, “How was it?”
Debbie started, “This exercise clarified our thoughts. We agreed that helping Mike’s parents is our top priority. They are not able to work or borrow money if they need it. Our kids still have that option.”
Mike added, “We want to help our children pay for their college tuition but don’t want to jeopardize our retirement goals. We all may need to make some sacrifices.”
As we parted, I asked Debbie and Mike to find the courage to discuss their concerns and priorities with their parents and children.
Conversations with family members can ease anxieties and pave the way for constructive actions.
Talking with parents about their financial lives as they age can help in understanding their priorities and concerns. Speaking with children about the level of support they can expect as they approach adulthood provides clarity and a chance to start making choices and planning their lives too.
When we next got together, I asked Debbie and Mike if they had spoken with their families about their concerns.
Mike started. “We did and my parents appreciated our concern for them. They have some savings but asked if we could review their cash flow, investments and insurance. We all would like to understand their risks and what, if any, financial assistance they may need.”
“Jackie and Max understand we will try to help them financially when they are in college, but that they may also need to contribute financially. I think our conversation may have given them the extra motivation to earn that scholarship!” Mike said smiling.
Debbie added, “Mike and I would like to establish savings goals and see if we are on track to meet them.
Helping our families is important for us. If we must reduce our expenses, we will.”
As we concluded, Debbie’s expression lit up. “I’m glad we all talked about our concerns. I can sleep better knowing we can take steps together to help ourselves and our loved ones.”