Nov 12

Facing financial pressures: 5 tips for the sandwich generation

(BPT) – Would you sacrifice your retirement and savings to simultaneously support your elderly parents and adult children? It’s not something many people envision, but millions are doing just that. These individuals are part of the sandwich generation—middle-aged adults caring for two different generations of family at the same time while planning for their own retirement goals.

Not surprisingly, this situation can cause significant financial strain. Research shows the pressure experienced by the sandwich generation is growing. According to a 2013 Pew Research Center survey, 21 percent of adults ages 40 to 59 provided some financial support to a parent aged 65 or older. By contrast, nearly half (48 percent) provided support to at least one adult child in the same period, up from 42 percent just seven years earlier.

“The emotional and financial strain of caring for an aging parent is challenging, but as more people also provide support for an adult child, financial security becomes a big concern,” says Adam Hamm, National Association of Insurance Commissioners (NAIC) President and North Dakota Insurance Commissioner. “Fortunately, making smart choices along the way can help alleviate the financial stresses felt by the sandwich generation and safeguard their long-term financial well-being.”

To avoid common pitfalls and to help plan for the unpredictable, the NAIC offers five tips to help consumers in the sandwich generation.

1. Create a plan: Alleviate confusion in the midst of a crisis by creating a plan for your loved one’s care.

2. Solicit support: Caring for a parent while working full-time and raising kids is physically and emotionally draining. Surround yourself with people who care and be willing to ask for help.

3. Talk about finances: Long before you think you need to, review your parents’ insurance policies to understand their wishes, so you’re informed enough to make changes together.

4. Set expectations: Be open about how much financial support you plan to give your children once they reach adulthood. Decide how long you will allow coverage under your health plan and who will pay associated co-pays and deductibles. If your adult children live with you, have the same conversation about auto insurance.

5. Review your life insurance: If your family depends on you as the primary source of income, take time to evaluate your life insurance needs. Getting the correct amount provides peace of mind. Once your child is financially independent, you may wish to decrease the amount of your policy.

“Initiating important conversations can help reduce stress and ensure finances remain intact,” says Hamm. “It’s essential to maintain an open mind and employ honest communication so everyone understands expectations.

Visit for more information, including a checklist with action items you can take now to ensure that unforeseen insurance needs do not impact financial stability.

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