The Sandwich Generation
By Sean Wintz, Associate Director, Financial Planning
Along with 20 million other Americans, I am a member of the Sandwich Generation. That’s the nickname given to those who are caring for or supporting aging parents and their own children at the same time — all while managing a career and trying to fund retirement.
My story began some years ago, before I joined Edelman Financial, when I received a life-changing phone call: My mother had had a stroke.
While the odds of a full recovery looked good, Mom would require many months of physical and occupational therapy. She also couldn’t live alone anymore.
Because I’m a financial planner, the Wintz clan looked to me for guidance. While I knew what actions we needed to take, it was hard to believe that they were necessary. We took for granted that my mother was a smart, sharp New York City hospital trauma nurse. She always took care of everything. And now she needed my siblings and me to help take care of her — emotionally and financially. Yet each of us had children who needed us too.
The first order of business was determining where Mom would live. Once she was released from the hospital and had started to regain her speech, we asked her what she wanted to do. She was adamant in her answer: She wanted to stay in her home of 30 years. A true New Yorker, a Yankee fan and a subway rider who has never owned a car or driven, she did not want to leave her friends, family or church. New York was her life.
Unfortunately, none of my siblings lived in New York. My brother, a physical therapist, was the best equipped to help her, but he worked for the National Institutes of Health and had just purchased a home in Maryland — and Mom refused our requests to sell her home and move to southern Maryland.
Actually, “refused” is not quite the right word for Mom’s reaction. She put up a fight. Believe me when I tell you that my mother is one of the kindest, sweetest people you could ever meet. Nevertheless, I have never seen a greater display of passive-aggressive behavior from anyone. She flatly did not want to move.
But after a month, she relented. To help with the transition, I left work for a few months and moved in with her to help her prepare for the move. During this time, I spent hours figuring out Medicare, monitoring her medical progress and taking her around town on errands.
Meanwhile, I had a family of my own who needed my attention too. My twins were finishing their junior year of high school in South Carolina and deciding which college to attend — a crucial time when kids really need guidance from their parents. And I had to figure out how to take care of retirement planning and my own expenses while I went several months without an income. It was a very emotional period for everyone involved.
The good news is that my story has worked out pretty well — so far. Today my mother lives with my sister in Richmond, Va. She is almost fully recovered and enjoys spending time with her grandsons. The sale of her house has covered most of the expenses, with some assets available for future expenses. And I’m firmly established with Edelman Financial.
But it would have been much easier to deal with this very difficult situation if we had planned for it in advance. Perhaps, like me, you’ve never thought you could become a member of the Sandwich Generation. Yet more and more Americans are finding themselves caring for both their parents and their children. One out of eight Americans who are 40 to 60 years old is raising a child and caring for a parent at home, the Pew Research Center found. On top of that, as many as 10 million Americans are caring for their aging parents from a long distance.
One reason for the growing number of sandwich families is that people are living longer than ever before. One hundred years ago, fewer than 7% of people in their 60s had one parent still living.
But longevity doesn’t tell the whole story. Economics plays a significant role as well. For instance, some retired parents lost substantial sums in the recent economic downturn and can no longer support themselves. Indeed, the over-70 crowd is the fastest-growing age group facing bankruptcy, according to the AARP.
Whatever the reason, many empty nesters find themselves with a full house once again as newly unemployed children move back in — alongside aging parents who can no longer live independently, for either financial or medical reasons. Add in college costs, the additional financial burden of a suddenly enlarged household — and the lost income resulting from the need to care for a parent with health issues — and, well, the situation can quickly become overwhelming for the unprepared. No wonder studies have shown high rates of separation and divorce among couples caught in such situations.
Fortunately there are steps you can take now to help you be prepared should your parents need assistance. Here are the six that we recommend. Remember: The earlier you start, the greater impact your planning will have.
1. Start now. Talk with your parents as early as possible. Ask how they want to live as they age, what kind of health care and lifesaving measures they do or don’t want, and who should make legal and medical decisions for them if they are no longer able to handle their own affairs. Be sure to talk about their assets too, because much of the above is only possible if there’s sufficient money available. This may be a difficult and uncomfortable conversation for you and your parents, but addressing these questions beforehand can help both of you avoid a lot of the Sandwich Generation problems that our family faced. Also make sure that all your siblings are involved, aware and in agreement with your parents’ desires and needs. One of the few things that has made my situation easier is having two supportive, stable siblings who care about Mom’s best interests.
2. Don’t stop saving. Be fanatical about saving. Have money set aside to mitigate the effects of missed income or increased expenses should your parents need care. Even if you’re flush with cash, the need to preserve your assets never goes away — because you might suddenly be paying for the costs of maintaining one or two households in addition to your own. This means that you need to avoid emptying your retirement savings to pay for your children’s college education or your parents’ long-term care. I was fortunate that I had enough money in cash reserves to cover my months off — although it wasn’t easy.
3. Obtain long-term care insurance — for your parents. One of the most difficult aspects of aging is that by the time you need long-term care insurance, no one wants to insure you. Although our clients are usually good at securing coverage for themselves, too many fail to verify that their parents are covered — meaning that they incur the costs of care anyway, when the parents need it and lack the funds to pay for it. Have a conversation about LTC insurance with your parents now, for it might not be too late to get them a policy — even if you have to pay for it. Ric and Jean, for example, pay the premiums for all their parents, and several other planners in our firm do the same for theirs.
4. Check your parents’ insurance coverage. Make sure that your parents have both Medicare and Medigap health coverage as well as prescription coverage. Some people think that having just Medicare A & B is sufficient. It isn’t. Your parents need Medigap (or Medicare Advantage) to supplement plus another policy to cover prescriptions (for those who do not have an Advantage program).
5. Don’t feel alone. There are many support groups, guides, blogs and web sites to help you cope with the emotional and financial issues associated with the declining health and wealth of parents. I was lucky that my brother was working on his PhD in physical therapy care, but even with his expertise we struggled with Medicare and insurance regulations and understanding what is provided (a wheelchair) and what isn’t (a walker). Professional help is available for everything from asset management and estate planning to treatment plans and Medicare. Fortunately, we here at Edelman Financial provide much of the advice our clients need — thanks to both our training and personal experiences.
6. Know that one size does not fit all. Every family is different, so become aware of all your options and know what you can and can’t afford. For instance, my mother wanted to stay at home with the help of a home health aide. While we would have liked to have provided her with that, she didn’t have the $70,000 that it would have cost each year. Other families may face cultural or geographic issues. Find what works best for the parent and then work hard to provide it — and if certain members of the family refuse to support the plan, move on without them.
I was lucky that my siblings and I were able to work together to find a solution that ultimately worked for everyone. My mother is safe and happy, and that’s a wonderful feeling. And along the way, living with three generations of Wintzes under one roof helped me remember that family is where it all starts and ends.
Next Email Update: Balancing obligations of the sandwich generation where there is family conflict.