By Peter Mastrantuono
Nearly 25% of Americans are sandwiched between having one or two parents age 65 or older and raising their own young children or providing financial assistance to a grown child, according to the Pew Research Center.
The demands of caring for two generations of family are eye-opening. Consider these findings from Pew Research: The percentage of Americans assisting a parent financially is 28%, while 61% of Americans are providing financial help to an adult child. But care doesn’t just come in the form of money. It also takes the form of time and energy. For instance, 58% of Americans help their parents with errands, housework and home repairs, with 39% assisting adult children with these everyday chores.
The pressures on individuals, generally ages 40-59, caught in this sandwich are extraordinary. They can lead to emotional strains, stress-related health issues, work-related limitations and shortfalls in meeting important financial objectives, like college and retirement funding.
It may come as a surprise to many that a financial advisor can be an exceptionally valuable resource in meeting the challenges confronting members of the sandwich generation.
Engaging in a discussion with aging parents about their increasing physical limitations and diminishing cognitive abilities can be extremely difficult as these discussions are emotional fraught, going right to the heart of personal independence, finances and the parent-child relationship dynamic.
However difficult and complicated a conversation about finances, wills, health care directives and powers-of attorney may be, having one is essential. A financial advisor, as an objective third party, can be an ideal person to facilitate such a dialogue, evaluate finances and investments and work in concert with an estate planning attorney to create a plan for aging parents to meet the challenges that lie ahead.
Providing financial assistance to aging parents and/or to grown children adversely affects the ability to save for their young children’s college education or for their own future retirement can be seriously compromised.
These multiple, competing financial demands can be overwhelming, leading to planning paralysis. This is where a financial advisor can be especially helpful. A financial advisor can work with individuals to find practical solutions and a realistic path to help achieve their important financial goals. A financial advisor’s advice goes well beyond simply calculating required savings amounts and recommending appropriate investment strategies. An advisor can also help with budgeting and cash flow management, as well as other non-financial strategies for attaining financial objectives.
The financial challenges confronting the sandwich generation may be the least of it. Coping with the emotional stress and navigating unfamiliar waters, like elder care, may be more immediate and acute concerns. Even here a financial advisor can play a valuable role by directing individuals to resources that can assist with the myriad of emotional and care planning issues associated with caring for an elderly parent.
Peter Mastrantuono is a contributing writer to www.myperfectfinancialadvisor.com, the premier matchmaker between investors and advisors. Peter worked for over 30 years in the wealth management industry, focusing on retirement planning, investing, asset allocation and financial planning.
