Three Coping Strategies for the Sandwich Generation

You’re focused on hitting a big deadline at work when your father calls. He seems very forgetful lately. As you worry about his well-being, your daughter texts you because she’s stressed about exams. Now you’re worried about her, too. If you are caring for your own family and are also increasingly responsible for one or both parents’ care, welcome to the “sandwich generation,” which can wreak havoc on your financial plan.

What is the sandwich generation?

Generally, it’s the group of individuals who fall into the demographic of simultaneously providing support to—or being completely responsible for—children and parents (or other aging relatives). We believe a few factors have made the sandwich generation a significant phenomenon, particularly for women in their 40s, 50s and early 60s. First, it’s becoming more common for people to wait longer to have children.¹ Second, life expectancy is generally increasing.² Due to these factors, the window of time in which people may be called upon to care for both children and parents is increasing. According to the Family Care Alliance, a nonprofit association representing caregivers, fully two-thirds of family caregivers are women.³ In addition, a February 2020 New York Times survey found that among respondents caring for older family members, 32% said they had made financial sacrifices, while 28% had made career sacrifices to do so.⁴

If you find yourself struggling with juggling work and cross-generational caregiving responsibilities, you’re not alone. We have found ourselves in the sandwich generation as well, so we understand it can be a challenging phase. To help you cope, three of our CI Wealth Advisors—Abby Rosen, Barbara Bilello and Jane Newton—each highlight an area on which you can focus right now.

1.    Get the legal paperwork done

Abby Rosen recommends completing all the required paperwork. As parents age and face new health, cognitive and financial concerns, you may need to become more involved in managing their affairs. To do so, you will likely need various legal documents to give you permission to speak with doctors, financial institutions and others, as well as make a variety of medical and financial decisions, if needed, on your loved one’s behalf. These documents might typically include a power of attorney, which gives you a defined amount of legal authority to act on the individual’s behalf, and a health care directive or proxy, allowing you to make medical decisions for the individual.

Once these documents are in place, you’ll be authorized to speak to doctors about care, conduct financial transactions and take other actions necessary to ensure your parents’ well-being.

2.    Conduct a financial check-up

Take note of what financial circumstances you’re facing. That’s the advice from Barbara Bilello. Good financial habits have a wide-ranging impact on many aspects of your life. You’ve likely worked hard to instill those habits in your children. However, as parents age, it’s not uncommon for them to find tending to financial matters more challenging. They may avoid dealing with unexpected expenses on a fixed budget or have trouble sticking to their spending plan if they’re experiencing cognitive decline.

We recommend working with your loved ones to develop a system for paying bills, managing tax payments and ensuring that other financial matters are handled. Depending on the complexity of your family’s wealth, you may hire a bill-paying service or assign a trusted member of the family to assist monthly. While the conversation may be difficult initially, getting this older generation’s finances in order can help everyone gain greater peace of mind.

3.    Create a financial road map

Know what your financial path is and your options, advises Jane Newton. Caregiving comes with certain financial responsibilities. You may have older children who need help with college or who have launched their careers but still need some help now and then, especially given the pandemic’s profound impact. At the same time, your parents may encounter unexpected expenses with which they need help, such as requiring additional care in their homes. You’re caught between concerns about your kid’s financial security and questions about your parents’ financial well-being as they age. Somehow, your own financial security needs to be part of the equation, too. Don’t neglect your own finances!

We believe this is a critical time to create or update your financial plan. By taking stock of where you are in terms of your financial goals—and where you may be headed—you can develop a clearer picture of how and where you may help family members. Your financial plan is a road map that shows you the financial implications of your decisions. It can help provide the clarity you need to make the right decisions for your entire family.

If you’re in the sandwich generation and are feeling challenged, reach out to your CI Private Wealth Advisor to help you think through, map out and navigate the path ahead.

¹ https://www.nytimes.com/2021/06/16/us/declining-birthrate-motherhood.html
² https://www.weforum.org/agenda/2022/11/countries-compare-on-healthcare-expenditure-life-expectancy
³ https://www.caregiver.org/resource/women-and-caregiving-facts-and-figures/
⁴ https://www.nytimes.com/2020/02/11/parenting/sandwich-generation-costs.html

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