In 2005, an AARP report noted the fact that 25% of Generation X-ers (ages 29–39 at that time) were still receiving financial support from their parents or other family members. Would you care to guess how that trend has changed from then to now? According to a 2024 report from the Pew Research Center, 44% of young adults said they received financial assistance from their parents. Maybe more significant is the fact that 36% of those parents who provided the aid indicated that doing so had done damage to their financial situation.
Meanwhile, more and more of the parents of those young adults are also faced with the necessity of caring for their own aging parents. In other words, many adults in their 40s, 50s, and even 60s are joining the “sandwich generation”: squeezed between providing for their offspring on the one hand, and their parents on the other. It’s a tough place to be. In fact, caregiver fatigue is a real and pressing problem for a significant portion of the more than 50 million Americans currently estimated to be providing unpaid care for family members. We’ve posed the question in a previous article: Who is taking care of the caregivers? It’s a real problem.
What’s the answer? Well, as with most problems, part of the solution lies with asking good questions and planning carefully, based on the answers you get. If you believe you may soon be facing the need to provide care for aging parents, for example, here are some important questions to ask them:
- 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?
Now, you probably don’t want to make it seem like you are interrogating Mom and Dad, but having the answers to these questions will help you assess your parents’ capabilities to participate in and help pay for their upkeep and well-being.
And there are other ways to make sure you’re looking at all the possibilities. For example, 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 the 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?
But what about those adult kids who are still “on the payroll”? Once again, asking some good questions may lead to some helpful answers.
- 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?
Let’s face it: we all love our children and want the best for them, but when an adult child who is otherwise capable of being self-supporting is living with you, it is important to set reasonable, clear boundaries. After all, the last thing you want to do is create an unhealthy dependency in a person whom you have raised to be—and who is capable of being—independent.
In both events, you will need to guide your subsequent financial decisions by the information you receive. And other scenarios can come into play, as well. Perhaps you still have a high school student at home who is looking to attend college. At the same time, one or more of your parents may experience failing health. How will you cope with providing for the next generation at the same time you are offering care to the previous one? These considerations should guide your decisions about lifestyle, saving, career trajectory, and other important life events.
In all of the situations above, your financial advisor can also be of great help. Sometimes your advisor can bring a more independent, less emotionally involved voice to the discussion. This can be very useful when trying to explore the real needs and resources of aging parents. It can also be helpful when having conversations with adult children who need to realize their own responsibilities and the burden they may be placing on their parents by continuing to be financially dependent on them.
The fact is, every life journey is unique. Your financial strategy should be driven by the priorities that are most important to you. If those include assisting older relatives or providing temporary support to adult children who are “finding their way,” it’s important to have a blueprint for accomplishing these goals that still allows for your own future financial security.
It’s not a lot of fun being “in the sandwich,” but with some good communication and planning, you can keep the experience from taking a bite out of your future! If you’re feeling squeezed by “two-way caregiving” and are looking for some answers, Mathis Wealth Management can offer sound financial guidance that is driven by our fiduciary responsibility to always put clients’ needs first. If we can help, please get in touch.
