Easing the strain for the sandwich generation
By Paul Clitheroe AM
The 2015 Intergenerational Report (IGR) confirmed that the majority of us can expect to live longer than people in previous eras, but it’s the so-called ‘sandwich generation’ who may feel the squeeze financially.
The sandwich generation are those baby-boomers, usually aged in their fifties and sixties, who are caught between caring for elderly parents and supporting adult children who may be studying or saving for a first home.
While I think it’s great news that we’re living longer, clearly it can increase the challenge of funding a comfortable life for longer.
With this issue in mind, the really interesting IGR findings include both male and female average life expectancy jumping significantly by 2055, with males expected to live to 95.1 years and females to 96.6 years. Also, the number of Australians aged 65 and over is likely to more than double by 2055 compared to today. That means there could be as many as 40,000 people aged 100 and over by 2055 and being 60 myself, I could be one of them!
All this means that at a time in their lives when they could reasonably expect to be kicking back and enjoying some financial security and leisure time, the sandwich generation is now highly likely to have increased demands on their finances and other resources.
Caring for elderly parents
Supporting seniors who require a high level of day-to-day care can be particularly challenging, and at some point you may need to consider an aged care facility. If you are thinking of placing parents into aged care, I recommend you seek assistance from a good financial adviser who can discuss this with all of you, including the different options around funding accommodation.
If you decide to have your ageing parents live with you, it might be worth considering a bigger home or adding a granny flat to your existing property.
This option can give seniors – and you – some independence and personal space, but also means if anything should happen to your elderly parents, you’re not far away.
Supporting adult children
Then there are the adult children you may be supporting… If this is the case, try to establish some ground rules so everyone contributes to running the household – both practically and financially.
Help those children who are studying to get into the habit of paying their way. Some parents put the ‘boarding’ money their child pays them into a savings account, so they have a useful lump sum for when they do finally move out.
If like a lot of baby-boomers you have experienced an adult child leaving home, only for them to return later in order to save for a deposit or some other reason, try to make sure you don’t fall back into the old parent/dependent child relationship. This time around, share the responsibility of the cooking, cleaning and laundry – the arrangement should be a mutually beneficial one!
Caring for yourself
If you have been sandwiched into caring for elderly parents and supporting adult children, then it’s important to try and take time out so that your relationships, career, financial and personal lives aren’t adversely affected. Asking other relatives, or indeed paying a service to help share the burden once in a while, can give you a well-earned break.
If you’re the ham in the sandwich in your family, then having a financial plan in place will help you save for holidays, a new car and some luxury items, as well as help fund your retirement – whenever that may be.