THE SANDWICH GENERATION
Lori Z. Bahnmueller
Michigan Credit Union League - Your Money Matters
Do you remember the days when someone else cooked your meals, cleaned your clothes, drove you around town and paid all of your bills? Chances are those are faded memories of your childhood and Mom or Dad was that "someone else." As an adult, you are probably beginning to realize that now is the time for paybacks. Whether it means driving them to and from doctors' appointments, helping with their shopping or helping with the monthly finances, you may be called upon to do a little parent-parenting yourself. Even if it hasn't affected your family directly, it's likely you know someone who has been.
When the time comes, most of us are happy to help our parents. Financial strains however, often arise, especially when adult children are still caring for their own children. Financial pressures from children (especially in the college years) combined with those from aging parents can place you in the "sandwich generation." The sandwich generation is a descriptive term for adults in their 40s and 50s, most often with children, who are the primary care givers for their aging or ill parents. It's no surprise that this is a growing concern in today's society. The population aged 65 and older grew 171 % between 1950 and 1994, compared with 73% for the general population. It is estimated that between 1994 and 2050, the number of people aged 65 and older is projected to increase 138%. The number aged 85 and older could grow 402%! Recognizing this trend, and preparing financially for it, is the best course of action.
You can take some very basic steps to help your parents, yourself and your children when the time does come. First, make sure that they have direct deposit for every source of income they receive --social security, pension or dividends. Likewise, make sure that all their utility bills are on automatic payment plans. Taking these steps will ensure that no checks are lost or stolen in the mail and no bills have been forgotten in a drawer.
Talk with them about the future. Make sure that a trusted family member knows where all their important papers are kept, such as insurance policies, a list of assets and their wills. Remember that someone must notify the insurance company of any illness or death and he or she will need the policy before the call can be made.
If your parents don't have a will, encourage them to write one themselves (using a statutory will) or to have one written. If a person dies without a will, any remaining possessions are divided among close relatives according to state law. One possibility may be the Michigan Statutory Will, which is a standard form that can be filled out without having to use an attorney. The statutory will is only for those individuals who do not have complicated business investments, large amounts of property or tax shelters. It is not suggested for those who have remarried and want to protect the interests of children from previous marriages. If, on the other hand, you have a house, some money in the credit union or bank and a few antiques, the statutory will is a simple feasible approach. Free copies can usually be obtained from your state legislator or public library.
Thinking about the durable power of attorney may also be wise. This allows someone to sign tax returns, write checks, receive statements and handle financial problems on behalf of your parents. There is also a proxy that allows someone to make health care decisions for them. These can be delicate topics of conversation, but very necessary. After all, your parents are still your parents and you will always be their child. It may take them some time to adjust to the change in giving-receiving roles. At the same time, you all want them to remain as independent as possible for as long as they can.
We all would like to find the fountain of youth and be young and energetic forever. Nevertheless, as we grow older, we will watch our parents age too. We are taught that Moms and Dads know best. In reality sometimes they don't have all the answers and may need your help. As you help them, learn from the experience so that you can plan for your own golden years - starting now.