In your mid-30s and 40s, you can start to hit a financial stride. You’re advancing in your career, making meaningful progress toward long-term investments, and you’re finally enjoying a bit of breathing room to focus on your life, family, and goals. But that sense of stability can quickly dissolve once you enter the so-called sandwich generation—that stage of life where you start supporting one or more aging parents, while caring for your children at the same time.
As lonely as multigenerational caregiving can feel, you’re not alone. The sandwich generation includes around 1 in 4 U.S. adults, most of whom are in their 40s and 50s, according to Pew Research Center.
Joining the sandwich generation can come with a new, complex set of financial challenges that can disrupt both your short- and long-term goals. But by planning ahead, you can ease some of the pressure on your finances and protect the progress you’ve already made toward your future.
Here are three costs to plan for as you become the sandwich generation’s newest member.
1. Career trade-offs that come with caregiving
When you’re juggling support for both aging parents and children, your career can become collateral damage. You might have to turn down leadership opportunities, reduce your availability, take extended time off, or even step away from the workforce temporarily to meet family demands. While these choices are often made out of love and necessity, they can result in a short-term loss of income, which can have long-term consequences for retirement savings, career progression, and financial security.
Planning ahead can help reduce the impact of the career trade-offs you may face when you’re pulling double duty as a caregiver, though. A Fulton Private Banker can help make sure you have access to enough liquid capital to manage short-term expenses, like covering mortgage payments and household expenses during a leave of absence. A Fulton Private Banker can also help you assess how a career pause or reduced income may affect your retirement and other long-term financial goals, and adjust your strategy accordingly. For instance, you may plan to increase your retirement contributions in a few years to make up for lost time in the market now.
Your career will be waiting, but right now, your family needs you. With a plan in place, you can give your family your full attention without losing sight of your own financial future.
2. Dual care expenses that add up quickly
Even high-income professionals can feel the financial pinch when caring for two generations at once. Covering daycare, nanny service, or private school tuition combined with assisted living costs and in-home health aides for a parent can add up quickly. Without a clear strategy, these overlapping expenses can disrupt your broader financial goals, whether that’s funding your children’s future education expenses, buying a second home, or investing in a new business venture.
Taking a proactive approach to planning for multigenerational care expenses can help keep your long-term financial goals on track. This may include using your savings to cover short-term expenses while preserving long-term investments, reassessing your cash flow, or purchasing insurance policies that can offset some of the rising costs of long-term care.
3. Housing changes that come with added costs
Even if you love your home, taking on additional caregiving responsibilities might have you rethink your living situation. In some cases, that might mean moving to a larger residence, building a new addition, or converting an existing space in your home into an in-law suite. You might even consider purchasing a second property, so your parents can live closer to you while still having some independence. While these changes can offer greater peace of mind and improved quality of life for those you love, they can make your financial picture more complex.
Including these housing decisions in your overall wealth strategy can help you get your family what they need right now while advancing your long-term financial priorities. For example, you may find that it’s more cost-effective and financially strategic to build onto your current residence instead of buying a larger property, or that financing a second home allows you to preserve liquidity for other goals, like investing or funding future education. The key is to analyze all the options available to meet your caregiving and lifestyle needs, while factoring in how each path could affect your future financial health.
Becoming a member of the sandwich generation comes with a new set of stresses, but financial problems don’t have to be one of them. A Fulton Private Banker can provide tailored strategies to address the immediate costs of caring for kids and parents while helping you stay on track with your long-term financial goals. Let us help you support the ones you love.
