Many people are members of the sandwich generation because they’re confronted with problems related to caring for aging parents while still raising a family. If you’re one of them, here’s some advice directly from a Regions Wealth Manager.
As a Wealth Executive, I’m used to helping my clients through a host of life’s challenges. And in recent years, more clients are coming to me with worrying stories about their aging parents—from health problems like dementia to attempts to defraud them of their wealth.
One woman said her mother had become convinced that she had won a new luxury car, even though she’d never entered a raffle. Others report their parents getting calls from people claiming to have their grandkids held hostage, stating they need to wire money or the kids will get hurt.
All of this is going on while my clients are busy working and raising their own children. And these are just some of the stresses faced by the so-called Sandwich Generation—people typically in their 40s and 50s who have both a parent aged 65 or older and a child 18 or younger. In many cases, they provide financial support to both their kids and their parents.
I work with these clients to help them navigate what can often be intense emotional and financial pressures without sacrificing their own well-being and priorities. Some of the tools I use include:
Proactive and ongoing planning.
Because people in this position must manage conflicting demands on their financial resources, planning becomes critical. By establishing priorities and a road map to their financial goals, it’s possible for them to simultaneously save for their retirement, a child’s college and adequate care for elderly parents. Planning also highlights the difficult choices and trade-offs they may need to make. I sometimes remind my clients that it’s possible to take out a loan for college, but nobody will lend them money for retirement.
A power of attorney and durable medical power of attorney.
There often comes a time when elderly parents are no longer able to make sound financial or health-care decisions. Before that happens, I encourage my Sandwich Generation clients to secure the legal authority to make those important decisions by executing a power of attorney and a durable medical power of attorney. Be aware that some financial institutions won’t accept a blanket power of attorney, so take the time to find out what’s required to control your parents’ accounts.
A document locator.
A complete financial picture is essential to good decision-making. But that’s impossible if you can’t locate a parent’s accounts, find important documents or identify her advisor. At Regions, we share a document locator with clients to help them collect all the information they need to make smart choices on a loved one’s behalf.
A trusteed IRA.
Clients often worry about the financial choices their children might make if they were to inherit a significant amount of money all at once. Trusts and trusteed IRAs are one way to pass money to your heirs, but with restrictions on how and when they access that money.
