If you have aging parents and kids you're still raising, then you're a member of the "sandwich generation."
People in the sandwich generation tend to think of issues with aging parents revolving solely around physical well-being. Too often we fail to see that as parents age, their mental capacity may slip some. Many times it's very subtle and we don't notice right away or don't want to notice.
The Pew Charitable Trust reports that roughly 1 in 6 of us are sandwiched between financial responsibility for aging parents and younger kids.
Half of all adults aged 40 to 60 are providing financial support to grown children. So we've got a lot on our plates to figure out how to save for our own future.
If you're younger, you can virtually never save enough money. Because you never know where the need will come from.
Meanwhile, I recently saw a report in The Wall Street Journal where four economists studied how people over age 70 handle their money. There's this weird kind of loop that happens. We start out making financial mistakes in our 20s because of inexperience. But we do the same thing in our 70s because our minds slip away! Of course, this is not everybody, but the overall effect is that the average senior makes a lot of mistakes.
Adult children of aging parents are often afraid of asserting their authority in their parents' financial matters or expect that they'll get a lot of push-back. But you don't want them to end up destitute, do you?
You need to do more than just have "the talk" with your parents. You need to have an ongoing series of discussions. Here are some of Clark's pointers for helping aging parents manage their finances:
- Simplify, simplify, simply. Reduce the number of accounts they have. Make sure all paperwork is together. Instead of advising, just help them organize. That's a non-threatening way to approach the situation.
- Durable Power of Attorney is key. It's a document which allows your parents to give authority to you to make financial/legal decisions and to make financial transactions on their behalf. If you're just broaching the topic for the first time, approach it as a question: "Say, where did you file your Durable Power of Attorney?"
- Do your parents have a will? Have they thought about their wishes at the time of their death? Take on clerical tasks rather than giving advice. Remember, always do it in the form of a question, never as a command.
- Determine what outstanding debts your aging parents have. The Federal Reserve reports almost half of all retirees still have a mortgage and almost 40 percent have credit card debt. As you move from a clerical role to a role of trust, it should become easier to discuss this topic.
Your parents did so much to raise you, and this is how you can pay them back now. Not everyone, of course, had parents who were kind and loving, but you can still return kindness to them even if they didn't extend it to you.