How to Avoid Being Stuck in the Sandwich Generation
While it's wonderful to be a part of a close-knit family willing to take care of one another, there's no denying the burden that puts on those in the middle of that generational sandwich.
If you want to break free from that cycle so that you don't become a burden on your own children as you age, it takes planning and perseverance. But it can be done.
What Will It Take?
Genworth (GNW) runs an annual survey that estimates the average cost of caring for an aging family member. The 2014 results:
|Service||Average cost||Average monthly cost (*)|
|Home health aide||$20/hour||$1,200|
|Adult day care||$65/hour||$3,900|
|Nursing home (semi-private)||$212/day||$6,360|
|Nursing home (private)||$240/day||$7,200|
|(*) Assumes 30 days/month and 2 hours/day of hourly charged services|
The average retiree's Social Security check -- $1,300 per month -- isn't enough to cover a basic lifestyle and in-home help. If you want to age gracefully without becoming a financial burden on your children, you need enough of a nest egg to cover those costs on your own.
Strategies for Easing Future Financial Burdens
Depending on where you are in your life -- and on who's depending on you -- there are several routes to shore up your own nest egg. The key is cost control on all sides and for all generations.
- Caring for your parents may involve difficult decisions on where they live. Should they sell the family's long-time home and downsize to a smaller, lower-total-cost residence? Or should you combine households? The total costs for you would likely be far lower than supporting two separate households, though personal stresses from that arrangement may outweigh financial benefits. You should see if lower-cost generics or older medicines could help their conditions as well as the newest, most expensive ones.
- Caring for your kids involves serious prioritizing expenses. The largest likely potential cost is college, and the traditional four-years-in-a-dorm experience is not the only way to get a marketable degree from a reputable school. Cheaper options include community colleges with credit-transfer agreements; ROTC programs that require follow-on military service; and scholarships based on academic, athletic or affinity groups. Don't forget the time-tested approach of working one's way through college to help defray the costs.
- Caring for your future needs means making funding your retirement accounts a top financial priority, once you've got your basic costs of living covered. Socking away money in your retirement accounts saves you taxes, keeps your money from being easily spent and gives you the chance to compound it to cover your own costs of aging.
Chuck Saletta is a Motley Fool contributor. For more on ensuring a comfortable retirement for you and your family, see our free report in which Motley Fool retirement experts give their insight on a simple strategy to take advantage of a little-known IRS rule to boost your retirement income.