A growing number of individuals and couples are entering the ranks of the Sandwich Generation. What they have in common is that they are caught in the middle between the competing needs and wants of their dependent children and aging parents. In addition, they also need to consider and prepare for their own retirement years and potential long-term care needs.
Most members of the Sandwich Generation value higher education and feel compelled to provide that opportunity for their children. Other “sandwichers” are pressed into service to give financial assistance to a divorcing adult child or to help raise a grandchild. In addition, as life expectancy increases, their aging parents are likely to survive well into their 90s and outlive their financial resources.
Increasingly, it is the middle generation that bears the responsibility for addressing the financial needs of both the younger and older generations. Unfortunately, the unintended result is that the financial needs and wants of the middle generation are squished, squelched, and squeezed out.
As an alternative, is it possible to balance financial responsibilities across generations? Are their ways your clients can help their children and their parents without sabotaging their own long-term financial security and quality of life? There is no magic formula, but a proactive approach can improve communication, build financial resiliency, and nurture resourcefulness in all family members. You can help by building time into your meeting process for clients to reflect on their financial responsibilities across generations. Here are a few suggestions to guide your conversation:
- Are you concerned about balancing the financial needs and wants of your children and aging parents while also preparing for your own long-term financial security?
- Do your parents and/or adult children often rely on you for financial assistance and advice? If yes, how does this make you feel?
- Are you able to effectively communicate with your parents and children about their financial needs and wants?
- Are you able to say “no” to your parents and children when necessary?
- Do you and your spouse/partner generally agree on the degree of financial assistance to give your parents and/or adult children?
In addition, offer your clients the following guidance:
Encourage and reward independence. In an effort to demonstrate our love, we often do too much for our children and for our parents. The more we do for others that they can actually do for themselves, the more we undermine their autonomy. When we do too much for a loved one, we communicate to them, “You are not capable.” Nurture a spirit of self-reliance and self-confidence in those you love.
Start early. The negative impact of big expenses can be mitigated by planning ahead. Expenses like college tuition for your kids and long-term care for mom and dad are huge. Therefore, it is essential to research your options and make preparations well in advance of the event.
Expect involvement and cooperation. Involve your kids and parents in the planning and preparation for their needs and wants. Ask them (and expect them!) to contribute what they can. For example, encourage the older generation to think about their eventual needs and to plan ahead both financially and emotionally for their later years and the possibility of frailty.
Editor’s Note: Content in this article was adapted from the “Raise Your M.Q. Workbook.” The workbook is available to all Level 4 Money Quotient Licensees and can be added on to Licensing Levels 2 and 3. For additional information please contact email@example.com.