The Sandwich Generation

For many American families, the recession and current market uncertainty have impacted more than their portfolios. The Evercare® Survey of The Economic Downturn and Its Impact on Family Caregiving released last spring found 45 percent of caregivers reported that they are providing some kind of financial support to elderly parents as a result of the recession. And, in addition to the 65 percent of college graduates the US Census Bureau estimates now return home briefly after earning their degree, today’s high unemployment means it’s not unusual for adult children in their 30s and 40s to show up on their parents’ doorstep.

Whether you are caring for aging parents or adjusting to living with adult children, family dynamics can be more taxing than the financial strain. If you are feeling challenged by your role in the Sandwich Generation, a little advance planning can go a long way toward reducing stress.

Care Giving Tips

    • Sweat the details. Before a medical crisis hits, help your parents draft wills, create trusts, and write advance medical directives. You and your siblings also should designate a family member to handle medical and financial affairs. Additionally, take the time to review your parents’ health insurance benefits, including Medicare and Social Security, and find out where they keep their legal documents.

It also makes sense to discuss a bill paying system. Your parents may prefer the traditional means of paying bills, but automatic bill pay is an extraordinary benefit for caregivers or relatives charged with managing someone else’s finances. You might also get permission to pull the three credit reports your parents are entitled to each year so you can confirm all accounts are current and that identity theft has not occurred.

  • Review living options. Staying in their home may be the most preferable option for your parents, but that takes additional effort to coordinate necessary services. Many families opt to have mom or dad move in with them, at least temporarily. According to data released last fall by the U.S. Census Bureau, the number of parents who’ve moved in with adult children rose 67 percent between 2000 and 2007 to 3.6 million people. Notably, the number of parents under 65 living with adult children rose by 75 percent. Other choices include assisted living, nursing homes, and continuing-care centers. When you evaluate a care facility, talk to staff and residents rather than focus on fancy lobbies or restaurants. And have the contract reviewed by an attorney before you sign it.
  • Minimize risk. Most caregivers assess their parents’ insurance, but if you are providing care and financial support for parents in their 60s, you also need to ensure that you have adequate life insurance and disability income insurance to maintain your parents’ lifestyle in addition to your own family’s. If you don’t have long-term care insurance on yourself, you might consider purchasing a policy so funds remain available for both your spouse and your parents should you require long-term care.

Advice on Living with Adult Children
If you have an adult child living at home, you are not alone. In a recent survey by the Pew Research Center, 13 percent of parents with grown children reported that one of their adult sons or daughters has moved back home in the past year. These tips can help you co-exist with the group that social scientists refer to as “boomerangers:”

  • Insist they build an emergency fund. In many cases, the lack of an emergency fund (three to six months worth of money to cover living expenses) lands your child on your doorstep. It’s not too late to encourage saving, no matter how small the amount. Helping your child to set up a realistic budget and stay away from credit will help that essential account to grow.
  • Draft a contract. Establishing household rules regarding everything from late nights and noise to the use of family resources such as the car, computer, and TV can make it easier to get along. Also discuss who will pay for the extra groceries and other expenses and divide the chores.
  • Adequately insure. The amount stipulated for loss of personal property on your homeowner’s policy is usually a percentage of the dwelling’s coverage amount. So if your adult son moves in with his flat-screen TV, computer and stereo system, you may need to adjust your coverage. Your adult children don’t need to buy renters insurance if they live with you, regardless of whether or not they pay rent. However, if your child lives in an apartment above your garage, a renter’s policy might be in order.
  • Back off. Your college graduate is capable of drafting a resume, scheduling interviews, searching for an apartment, and planning their own move. Set a deadline for them to leave. Although that may sound heartless, setting an expectation for the move out date helps keep everyone focused on the fact that the long-term goal for the new graduate is to establish their independence.

According to the Pew Research Center “The Return of the Multi-Generational Family Household,” although sparked by the recession, the multi-generational family household trend has roots in demographic changes that have been brewing for decades. As of 2008, a record 49 million Americans, or 16.1 percent of the total U.S. population, lived in a family household that contained at least two adult generations or a grandparent and at least one other generation. This represents a significant reversal across all major demographic groups from 1980 when just 12 percent of Americans lived in an extended family household.

Given the sharp rise in longevity and high unemployment among young adults, it’s likely the multi-generational family household’s comeback will continue. If you find yourself caring for your parents or living with your adult children, keep the lines of communication open. It’s also important that your additional expenses don’t prevent you from funding your own retirement accounts. Finally, remember that in addition to facing challenges, you will have the opportunity to spend more quality time with those you love.