Stuck in the Middle with You

47% of Americans between the ages of 40 and 59 have children young enough to live at home and parents old enough to need caregiving aid.1 Economists have dubbed this the “Sandwich Generation” because their time and attention is divided. More than 40 million Americans serve as the primary caregiver for their aging parents, and the number of family caregivers is expected to continue growing as more baby boomers move into retirement.2

This can cause both emotional and financial challenges, especially while you’re trying to save and plan for your own retirement. Here are some tips on what you could do to help if you are in this situation.

Hold a family meeting with your parents while they are still healthy and get familiar with their finances, earlier rather than later. Setting clear limits in advance allows you to take pleasure and pride in helping your loved ones without becoming completely overwhelmed.

Find out if they have long-term care insurance or any other type of policy that can offset the cost of elderly care, whether at home (yours or theirs) or in an elderly community. Their existing assets, including annuities and life insurance, may offer withdrawal options that are triggered by medical conditions, but remember that policy withdrawals may reduce cash values and death benefits.

It may be a good idea to meet with your parents and their financial advisor so you can understand their retirement plan and how their investments work. This can also help to alleviate the awkwardness of getting involved in their investments and household bills.

If you still have children living at home and you’re set on paying for their college education, you may want to learn more about what investments and savings plans are available. One to check out would be a 529 college-savings plan, because earnings aren’t subject to Federal or State tax when used for certain qualified high education expenses.

It would be a good idea to speak to your own financial advisor about the potential expenses you may have due to caring for both your parents and children and how it could affect your own retirement. If you must withdraw from your investments, keep in mind the potential tax penalties on tax-deferred retirement accounts. These types of accounts should be your last resort. Speaking with your accountant would also be a good idea because you may be able to claim your parents as dependents if you pay for more than half of their daily care.

Most of all, remember that time with family is precious. Whether it’s the last few years with your children at home or the final years of a parent’s life, the better prepared you are to juggle these responsibilities, the more you’ll be able to enjoy being surrounded by family.

No matter what your situation is, it’s important to develop a conservative plan for retirement savings and financial security early on. Don’t fall into the trap of thinking you have to make financial decisions all by yourself – we’re here to help! Give us a call at 801-465-6990 if you have any questions or concerns.

1.Jessica Levy. Statesman Journal. April 22, 2019. “Managing responsibilities as part of the sandwich generation.” managing-responsibilities-part-sandwich-generation/3518999002/. Accessed May 20, 2019.
2 Administration on Aging, Administration for Community Living, U.S. Department of Human Services. April 2018. “2018 Profile of Older Americans.” P. 3. Aging%20and%20Disability%20in%20America/2018OlderAmericansProfile.pdf. Accessed June 21, 2019.

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