As the Boomers age and their adult children enter their peak earning years, more and more Millennials and even some Gen Xers are facing the dilemma of the “Sandwich Generation”: those who are still taking care of children and at the same time providing support and, in some cases, serving as caregivers for aging parents. Needless to say, there’s a lot of stress involved: emotional, physical, and especially financial. How do you divide your attention and resources between two different needs, both involving people you care deeply about?
The answer, as with most complicated situations, involves a commitment to good communication, combined with careful planning and setting realistic expectations for everyone involved. It can be tough, feeling squeezed by the needs of generations on either side of you, but it is manageable, and in this article we’re going to look at some strategies that can help you cope.
When the Kids Move Back In
Providing some or all of the support for adult children is currently a rising trend that creates a major challenge for the “sandwiched.” A 2017 US Census report indicated that the percentage of young adults, ages 18–34, who were still living with their parents was 34%, up from 25% in 2005. More recently, a 2023 Harris-Bloomberg survey found that almost 50% of young adults, ages 18–29, are still living with their parents: the highest rate since the Great Depression of the 1930s.
Many who find themselves caught in this intergenerational squeeze are dealing with caregiver burnout, poor self-care, financial stress, depression, and other consequences of needing to be “on” for everyone but themselves. However, this is where clear communication and setting reasonable boundaries can really take some of the pressure off. Here are some questions that parents can ask adult children (excluding those who are in college or technical school, for whom some support from Mom and Dad is more reasonable to expect) who are facing the prospect of living with their parents:
- How much can you contribute to housing and/or food costs while you are staying here?
- (If they are unemployed) What job prospects do you have? What is your strategy for finding work?
- How long do you think you will need to stay here before you can get back on your feet?
Certainly, we all love our children and want the very best for them, but when an adult child who is otherwise capable of being self-supporting is living with you, it is especially important to set reasonable, clear boundaries. Otherwise, you risk creating unhealthy dependency in a person whom you have raised to be independent. It is certainly appropriate for adult children in this situation to do all they can to avoid being an additional financial burden on their parents—especially when the parents are also taking responsibility for an older generation’s well-being.
You may even wish to consider setting a time for your adult—and still “dependent”—child to meet with you and your financial advisor. It is often the case that a financial advisor can objectively and professionally voice the financial realities that parents may be reluctant to verbalize. It may even be helpful to have the adult children and their parents draft and sign “boundary” documents that specify obligations to contribute financially by purchasing food, helping with utility payments, or otherwise reducing the financial burden.
What about Mom and Dad?
Considering the needs of aging parents should also involve asking good questions and listening carefully to the answers. Some of these may include:
- Do you have a will? Where is it? Who drafted it for you?
- Do you have any advance medical directives in place? Are they in writing? Where are they kept?
- Who is your lawyer? Your investment advisor? Your doctor?
- Do you have any life insurance policies? Where are they? Are your beneficiary designations up to date?
- Do you have retirement accounts? Where are they housed?
While you don’t want to come across as “interrogating” your aging parents, you need the answers to questions like these in order to assess their capabilities, resources, and priorities. This, in turn, will enable you to make better decisions—and help them make better decisions—about their upkeep and well-being. The goal, of course, is to uncover the real situation and needs. Does Mom really need to go into a memory care facility right now, or could the current issues be handled by family members, possibly with part-time assistance from a home health professional? Do your older parents have assets that could be utilized to offset necessary expenses? Are they still living in a home that’s really too much for them to take care of? Could downsizing the real estate free up resources for more pressing needs?
Taking Care of Yourself
As you negotiate the tricky terrain of living in the “sandwich generation,” you always need to keep in mind that the only way you can take care of anyone else is by taking care of yourself. In other words, the best financial benefit you can provide for your children and your parents is to make sure you will never be a burden. In this regard, it’s usually helpful to keep the basics in mind:
- evaluate the adequacy of your insurance coverage, especially healthcare;
- consider long-term care coverage (both for yourself and your aging parents);
- maximize contributions to tax-advantaged accounts, especially if employer matching is available;
- consider a health savings plan (HSA) if eligible;
- review your spending plans and budgets; prioritize and economize where possible.
At Curio Wealth, we believe in the power of asking good questions. If you are facing the prospect of being “sandwiched,” having conversations like those above can help you gain clarity in planning for the road ahead. And if we can provide guidance and advice, we’re always here to listen and help.
