Customer Service Manager Magazine
Six Common Sandwich Generation Challenges – And How to Address Them
By Saghir A. Aslam
Rawalpindi, Pakistan
(The following information is provided solely to educate the Muslim community about investing and financial planning. It is hoped that the Ummah will benefit from this effort through greater financial empowerment, enabling the community to live with dignity and fulfil their moral obligations towards charitable activities).
If you’re raising a child and also caring for aging parents, you’re in the sandwich generation – and you’re probably already making sacrifices to meet the needs of those in your care.
It’s a difficult task; research shows that members of the sandwich generation are under a huge amount of emotional and financial stress.
“Typically, people in this position are so busy caring for others that they have very little time and ability to focus on themselves and their own finances.”
The good news: At least some of that stress is avoidable. Here six common stress-inducing situations facing the sandwich generation – along with advice on how to address them.
- Sandwich Generation Challenge #1: You avoid difficult conversations. Now’s the time to ask about your parents’ needs and wishes, where they keep important documents, and what financial resources they have. These conversations can be awkward, but the information will be invaluable if an unexpected medical crisis requires you to step in. “This will also give you a better idea of how much you may need to contribute to their financial well-being as they get older.”
- Sandwich Generation Challenge #2: You tap your retirement funds to cover tuition. Sending your child to an Ivy League school should not come at the cost of your future well-being. Remember, you can take out loans for college, but you can’t borrow for retirement. “We often see people sacrificing their own financial security to support their children, whether it’s paying tuition or helping with a down payment on a house.” “It’s important to set limits when it comes to your children. Tell them they can’t go to the most expensive college, or if they do, they have to take on some student loan debt. That way, you won’t be a financial burden to your children later in life.”
- Sandwich Generation Challenge #3: You do it all yourself. Don’t be afraid to ask siblings and other family members for help, whether it’s managing medical appointments, childcare, or simply getting the break you need to take care of yourself. You can also investigate in home services to help extend a parents’ independence, whether it’s bringing in a cleaning service, getting groceries or meals delivered, or hiring someone to drive them. As your parent requires more assistance, a professional caregiver can be a lifesaver.
- Sandwich Generation Challenge #4: You don’t consider long-term-care insurance. It may be too late for your parents, but if you’re in your 50s, or 60s, do your own kids a favor and look into purchasing a long-term-care policy. “We did a report that showed that the annual health care cost after age 85 averages nearly $35,000*. “That is huge. A lot of people fail to plan for that longevity.”
- Sandwich Generation Challenge #5: Your portfolio is too conservative. Baby Boomers and Generation Xers often have too much cash in their portfolios, an emergency fund to cover six to 18 months of living expenses. If you have more than that, you may lose money relative to inflation of equity investments as you near retirement. “People are living so much longer,” she says. ‘Investing in equities can help you grow your assets. Remember you may need to provide for yourself as many as 30 or 40 years of retirement.”
- Sandwich Generation Challenge #6: You don’t have an investment plan. It’s easy to get so focused on the day-to-day demands of caring for others that you don’t plan for your own future. Make sure you meet with your financial advisor at least once or twice a year. He or she can help you diversify your portfolio, make sure you’re on track for retirement, and also help you plan for expenses such as college tuition or nursing home care for your parents.
This article has been written in collaboration with Walt Hommerding senior vice president investment of Wells Fargo .
(Saghir A. Aslam only explains strategies and formulas that he has been using. He is merely providing information, and NO ADVICE is given. Mr Aslam does not endorse or recommend any broker, brokerage firm, or any investment at all, nor does he suggest that anyone will earn a profit when or if they purchase stocks, bonds or any other investments. All stocks or investment vehicles mentioned are for illustrative purposes only. Mr Aslam is not an attorney, accountant, real estate broker, stockbroker, investment advisor, or certified financial planner. Mr Aslam does not have anything for sale.)
