If you’re aged 40 to 60, you may be part of what’s known as the ‘Sandwich Generation’, caught between two generations and obliged to provide for both – bringing up your children, while also supporting your aging parents.
The term was first coined in 1981 by social worker Dorothy Miller, to describe women in their 30s to 40s who were “sandwiched” between young children and aging parents as their primary caregiver1. Today the term is still relevant, but things have changed, and it now encompasses men and women, and a different age range.
Linda Stonier, Chief Executive Officer of Stone Wealth Management, says that one of the factors that places people in this situation is women delaying having children until much older. “Becoming parents at a later stage in life means that, at the time when your own parents become needier, more dependent or ill, you might still have young children who require plenty of financial and emotional support. In previous generations, the children had left home by the time the aging parents needed assistance. Another factor is that people are living longer thanks to medical advances, so the sandwich generation carries the burden for an extended time.”
Pew Research Centre’s studies show that 47% of adults in their 40’s and 50’s have a parent aged 65 years or older, and are raising a young child or supporting a grown child aged 18 or older. One in seven middle-aged adults provide financial support to both a parent and child. No matter whether you are a member of the Boomers, GenXers or Millennials, at some point in your life you are likely to find yourself part of this unenviable group, which is why it’s best to prepare yourself emotionally and financially for what’s to come.
Emotionally, there are traditionally three main symptoms you will identify with when enduring the daunting ‘Sandwich Generation’ stage of your life – namely exhaustion, resentment and stress. Adults with dependent children and ageing parents feel constantly rushed compared to 23% of other adults. Analysis has found that many of the Sandwich Generation suffer from higher levels of depression, stress and diminished well-being, compared to non-caregivers. As far as resentment is concerned, this builds up over time and can be reduced through support – but only if the level of support truly matches the caregiver’s actual needs. Furthermore, stress is all centred around the ‘what ifs’ and the ‘what nots’ during this period. It is always difficult to talk to elderly parents about sensitive subjects such as declining health and finances that pertain to the future.
Generally, the root of all three of these emotional symptoms experienced can be traced back to the financial burden that is typically faced by the ‘Sandwich Generation’. Often, the demands placed on you to meet the growing expectations you’ll face to look after your children and elderly parents can be enormous and seemingly insurmountable. Linda says that the good news is that it doesn’t have to be: “Through my years of experience as a financial advisor, there are a number of important guidelines you can follow to alleviate the financial pressures faced during this normally trying time.”
- Start by being proactive. If the ‘Sandwich Generation’ looks inevitable in your future, then start making plans now. Discuss your parents’ estate planning needs with them and your financial advisor. Talk to your children about their hopes and their wishes for their futures after matric. Don’t assume that you will be financially able to support them all in four or five years’ time. Part of this process includes discussing with your parents who will have the power of attorney, and the location of important documents such as wills, investments, trust documents, share certificates, etc.
- The next important guideline is to pay yourself first! The best financial gift you could bestow upon your children is not to burden them financially in later life. No parent wants to have to ask their children to pay for their upkeep and medical bills in their retirement. So, you might have to make some tough decisions about choosing retirement over university savings. And if you need to cut back on education, then so be, it because saving for your own retirement needs to be a priority. Save for their education yesterday.
- While we’re on the subject of prioritising saving for your own retirement, have the discussions with your financial advisor about your own financial portfolio and create an inventory of your assets, consolidate your accounts, and draw up your financial goals. Your financial planning is to include all payments, home loans, motor vehicle leases, children’s education, retirement planning and medical planning. Consult with your experienced financial advisor to help achieve your short term and long-term plans.
- Another top tip is to make sure you have built a robust investment strategy that can make the difference between financial security and money disasters. Look at your parents’ investments, if any. Your financial advisor is the one that makes sure you are adequately covered. You need to have these tough discussions with your parents to make sure they are too.
- Make it your mission to become an expert on medical aids. Find out exactly what your parents are entitled to and make provision regarding them becoming your medical aid dependents, if applicable. Think of your own end-of-life care.
- Turning your focus from your parents to your children – if any of your kids do return home to live with you, be very clear with them that they need to contribute. Don’t fall into the trap of allowing an adult child to live under your roof without making a relative contribution in some form. Either in financial contributions or in household chores, be open and direct about your expectations.
- Create an emergency fund. It’s always wise to have at least three months of living expenses set aside and accessible for unseen circumstances. Do not anticipate living on credit or cashing-in on long term investments. Keep a healthy fund and ensure that it is consistently replenished.
- Finally, try at all costs to not pass on the legacy of the ‘Sandwich Generation’ to your children. This period in a person’s life can be a debilitating, stressful and daunting one that tests all your resources. However, with the proper communication, planning and the creation of clear objectives, it can be a rewarding one as well that gives you the opportunity to turn a stressful time in your life into a meaningful one.
Just as you are briefed on an aeroplane to first put on your own oxygen mask, so it applies to your everyday life: If you don’t care for yourself, you can’t properly care for anyone else, be it emotionally, physically or financially.
- Ellen Hendriksen, PhD Savvy Pschologist “How to survive the sandwich generation”
- Tent Hamm https://www.thesimpledollar.com/financial-wellness/getting-through-the-sandwich-years/
- Emily Guy Birken “How the sandwich generation can stay financially fit – 7 tips to help your parents
- com ‘5 ways to financially survive sandwich generations stress’