Close-up: The Sandwich Generation

Physician's Money Digest, April 2007, Volume 14, Issue 4

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Sandwich Generation: The generation of middle-aged individualswho are pressured to support both aging parents and growing children.

Advancements in health care have had a significantand positive impact on how long we all live. Thoseadvancements have also created a quandary forthe millions of Americans who now find themselves in thatslice of the population known as the sandwich generation—and that segment is growing.

According to the American Institute of Certified PublicAccountants (AICPA), more than 25% of American familiesare involved in some way with elder or parent care. Theemotional and financial strains this can cause are doubledbecause many of these same families are simultaneouslytrying to plan for their retirement while funding their children'scollege education.

In a very real sense, members of the sandwich generationfind themselves caught between a financial rock anda hard place.

Preparing for the Obstacles

The challenges faced by physicians on a daily basis areseemingly endless. Now factor in caring and/or providingfor an elderly parent, and the pressure rises. These pressurescan be exacerbated if your family is small and dispersedover a wide geographic region, leavingyou as not only the primary caregiver but theonly available caregiver. And if funding yourchildren's college education is already a thingof the past, you could be faced with the dilemmaof "boomerang" children—those whohave come back to the nest because the costof living is too high after graduating college;they've experienced the loss of a job; orthey've just gone through a divorce.

The AICPA suggests that the best way tomeet these challenges is to prepare for thembeforehand. Don't wait until a parent dies orbecomes incapacitated to take action. Preparinga personal data record now could saveyou stress later on.

What information should be included in apersonal data record? The AICPA offers thefollowing outline:

•Financial information: bank accounts,investment accounts, and real estate holdings.

•Legal information: wills, durable powerof attorney, and health care directives.

•Funeral and burial plans: prepaymentinformation and final wishes.

•Medical information: health care providers, medication,and medical history.

•Insurance policy numbers and company names.

•Advisor information: names and phone numbers ofany professional service providers.

•Location of other important records: keys to safe-depositboxes and real estate deeds.

It's also a good idea to write down where these importantdocuments are located, and to store them in a safeplace. A safe-deposit box or even a good lock box in thehome is worth the investment. If you need to refer to thesedocuments, it will be comforting to know they are all inone, safe place.

Caring for Parents, Considering Kids

You may have noticed that your parents' physicaland/or mental abilities have diminished, yet, one or bothmay still live on their own. In those cases, it's important tocheck in with your parents on a regular basis. But, ratherthan absorb the brunt of this responsibility yourself, try toinvolve your children in the process.

If your children are young adults, they should understandthe changes taking place in their grandparents' livesand may welcome being part of the caregiver process. Ifthey're still in their teens, explain some of the changesthat may occur in your family's day-to-day routine. And ifcollege is approaching and you foresee dipping into thepaying-for-college fund to accommodate the needs ofyour parents, explain that as well so that there are no surprisesfor your son or daughter as they explore what collegesthey'd like to attend.

Most importantly, suggests the AICPA, you can't be anadequate caregiver—either physically or financially—if youdon't take care of yourself. Take the time to step back fromthe situation and dedicate time and money to your needs. Itwill make being a member of the sandwich generation thatmuch easier to handle.

Importance of Planning Ahead

When it comes to surviving life as a caregiverand member of the sandwich generation, planningis critical.

The American Institute of Certified Public Accountantsoffers the following tips:

•Start saving for the cost of college now.

•Control your debt. "Installment debts" (ie,car payments, credit cards, etc) should equal nomore than 20% of your take-home pay.

•Set financial goals and review them regularly.

•Invest as much as you are able to in yourretirement plan.

•Talk to your children about how much financialhelp they can expect (ie, college, weddings, etc).

•Talk to your parents about their plans andprovisions for the future (ie, long-term care insurance,retirement income, etc).

POP QUIZ

1) What percent of American families are involved withelder or parent care?

  1. 15%
  2. 20%
  3. 25%
  4. 30%

2) Information in a personal data record should include:

  1. Financial information
  2. Medical information
  3. Insurance information
  4. All of the above

3) The sandwich generation is:

  1. A generation of baby boomers who likes eatingsandwiches
  2. The new Wednesday special at the local deli
  3. Middle-aged individuals whosupport both aging parentsand growing children
  4. None of the above

4) You should involve your childrenin the process of caring for anelderly parent.

  1. True
  2. False

5) Surviving life as a caregiver includes setting financialgoals and reviewing them regularly.

  1. True
  2. False

Answers: 1) c; 2) d; 3) c; 4) a; 5) a.