Are You the Meat in the Sandwich Generation?

So far, about 20 million baby boomers (people born between 1946 and 1964) are also members of the sandwich generation and have already started to grapple with the formidable task of fulfilling three major responsibilities at once:

• Raising children and creating a college savings plan.
• Helping care for and/or support aging parents.
• Planning for retirement.

This number will continue to grow as baby boomers and their parents age.

The Ingredients
Baby boomers are different than past generations and are caught in the middle of these demanding responsibilities for three main reasons:

• They started their families later than previous generations and their parents are living longer - sometimes outliving their retirement savings.
  The result is boomers are still raising young children or sending them through college when their parents are becoming more dependent.
• Families are more dispersed today
  Boomers have scattered across the country and around the globe to pursue career opportunities, and their parents sometimes find that their nearest offspring lives hundreds, if not thousands, of miles away.
• Boomers are not as frugal as their parents
  While their parents (who may have lived through the Great Depression and a world war) saved conscientiously for retirement, boomers grew up in an age of seemingly unlimited natural resources, a fast-growing economy and periods of low unemployment. Now, many boomers find they’ve spent more and saved less than they should have, and some will have to play catch-up if they want to retire at all.

Creating an Appetizing Sandwich
While most baby boomers welcome the chance to help care for their parents and create close family relationships, they also may feel stressed, and at times overwhelmed, by the added demands and sacrifices. Some challenges baby boomers need to cope with are:

• Depleted energy and finances
  Caring for both parents and children could consume high levels of energy, as well as finances.
• Stalled retirement savings
  The ability to save for retirement could be stalled by the financial demands of both college-bound children and parents who need a higher level of daily medical assistance.
• Reduced work hours
  There may be a need to take an extended leave from work, reduce work hours or take lower-paying but more flexible positions.

The best way for baby boomers to reduce anxiety – and increase their odds of truly thriving – is by careful long-range planning, preferably in collaboration with parents and siblings. A good plan will address three issues:

• Legal
• Financial
• Emotional

To help you with long-range solutions, future articles will address the potential costs for each of the three generations in your sandwich, plus provide sources of financing and alternative strategies for navigating the uncertain future.

Some quick tips for baby boomers include:

• You and your spouse
  In addition to projecting short-term expenses for the coming month, quarter or year, you should anticipate long-term financial needs, so you’re not caught by surprise. For example, boomers in their 40s and 50s should be aggressively saving for retirement.
• Your parents
  Even if your parents are still healthy and active, you should think about who will care for them five, 10 or 20 years in the future, and what that care might cost in terms of dollars and time.
• Your kids
  Since college tuition for your kids probably won’t drastically shrink you’ll want to continue to fund a college savings plan so that opportunity is available for them.

If you need help now, don’t wait. The sooner you start preparing, the more options will be open for you.