6 Ways the Sandwich Generation Can Get Ahead


The Sandwich Generation — those caught caring for aging parents while still supporting children — face daunting financial challenges. How can they live up to their responsibilities, while still reaching their own financial goals? (See also: 10 Money Goals All 30-Somethings Should Have)

1. Set Boundaries

Simultaneously caring for a minor and parent is taxing on your "me time." All told, 42% of Gen Xers and 33% of Baby Boomers are living this scenario — and feeling the squeeze in places other than just their wallets. So, how to make time and energy for oneself when so many others are depending on you?

One way is to set boundaries. Maybe you need one or two days away from catering to the needs of others. Set up a schedule with other members of your family so that a spouse or brother or cousin is available to relieve you from in-home care duties on certain days. Perhaps common errands like lawn mowing and grocery shopping are becoming difficult to juggle. If you have a mature and capable child, consider delegating out some of these chores.

Setting boundaries might be as simple as carving out a two-hour block each day during which you engage in whatever activities — napping, exercising, reading — benefit you. The key, of course, is sticking to it. Honor that time you've created for yourself and know that it's helping not only you, but those who depend on you, too.

2. Consider Long-Term Care Insurance

If you're caring for an ailing parent, you may want to mandate that Mom or Dad invest in long-term care insurance. If they're resistant, explain that it's for you as much as it is for them. After all, you don't want to go bankrupt, and your parent doesn't want that for you either. Long-term care insurance policies reimburse policyholders a daily amount for services to assist with the cost of daily activities such as bathing, dressing, or eating. The cost of a long-term care policy is determined by factors such as how old the policyholder is when he or she buys in, and the predetermined maximum amount that the policy will pay per day.

3. Invite Mom and Dad to Move In

If your parents move in with you, you can all save money in property taxes — up to tens of thousands of dollars, depending on where you reside. Not to mention, the average annual cost of a private nursing home room is about $91,000, while the the cost of assisted living falls around $43,000.

Multigenerational housing eliminates such expenses and grants you the peace of mind that Mom and Dad are being well-cared for by yourself and other members of the family. Establishing a multigenerational household may seem daunting, but don't discount the many social benefits. Your children will have a better shot at developing a meaningful relationship with their grandparents if they're all living under one roof. Same goes for you and your parents.

4. Collect Rent From Grown Kids Who Move Back Home

At one time, it was embarrassing for a young adult to move back in with his or her parents. But today, that simply isn't so. In fact, thanks to The Great Recession, there are so many young adults moving back in with Mom and Dad that the stigma is practically non-existent.

Living at home eases the burden of student debt while helping young adults save for their education, a car, and a place of their own. But remember that all of these benefits are still well in play when you charge your son or daughter a fair rent. And you should. Young adults who pay to live at home are more likely to feel motivated to get a good job, establish a career, improve their education, and put their degree to good use. You needn't charge the amount it would cost to rent an apartment in your city or town. A couple hundred dollars a month is typically enough to keep your son or daughter edging to better themselves.

5. Claim a Parent as a Dependent

If you're caring for a parent who has a gross income of no more than $3,950 — this number excludes Social Security and disability — you can claim them as a dependent when you file your taxes.

6. Write Off Your Parent's Medical Expenses

The IRS understands the strain of paying for a parent's medical tab. If you footed the bill for a parent's medical care, you may be able to deduct those expenses when you file your taxes. To quality, total medical expenses, including the cost of prescription drugs, hospital care, and doctor's visits, must exceed 10% of your adjusted gross income.

Are you part of the Sandwich Generation? How are you coping?

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Guest's picture
Kimmy Burgess

"Sandwich Generation" great term!!! Persons who are caring for children and their aged parents are actually lacking in money after setting financial goals. Since the expenses are high there is always a chance for the pocket to be empty, this problem will always be existing. Financial responsibilities must always be shared.