Ep # 73: Tips When Financially and Emotionally Sandwiched Between Supporting Kids and Parents

The sandwich generation is defined as people who are still working, most likely in their 30's or 40's, that are responsible for bringing up their own children while caring for aging parents both physically and financially.  They are feeling caught between two potentially difficult situations, all while trying to focus on their own retirement as part of that process.  

This podcast episode discusses the human side of what we do.  There is not a spreadsheet or a financial planning program out there where you can plug these variables into the tool and it is going to tell you what to do in this situation. Everybody has their own personal outlook on how they want to approach these things and how do they want to prioritize them. It all comes down to tradeoffs, which is really what financial planning is.  We want to help people think about what are the ways that they can say yes to their own needs and goals and not have to feel like it's making it impossible to say no to the people they care about and that you may feel like they rely on you.  

Ben and Adam discuss how they would walk someone in the sandwich generation through prioritizing their goals and developing their own plan. We talk about what tradeoffs might occur for clients to effectively manage these competing interests. 

Tracking # T003810

Thanks for listening!

If you want to be notified when the next episode will be released, you can:

• Subscribe to the Show

For more insights on everyday financial planning questions, go to www.haasfinancialgroup.com

Contact Us:
Email us at info@haasfinancialgroup.com

Investment advice offered through Great Valley Advisor Group, a Registered Investment Advisor. Great Valley Advisor Group and Haas Financial Group are separate entities. This is not intended to be used as tax or legal advice. Please consult a tax or legal professional for specific information and advice.

Transcript

Benjamin Haas  00:03

Hi everyone and welcome to A/B Conversations where we will help you CFP your way out of it. A podcast where you get into the minds of a couple of Certified Financial Planners on how we think and feel about everyday financial planning questions and what should really matter most to you. A healthier financial life starts...now! 

Adam Werner  00:27

Hey Ben. Welcome back. 

Benjamin Haas  00:29

Adam, good to see you. 

Adam Werner  00:31

Likewise, always enjoy the podcast time.

Benjamin Haas  00:34

Let's do it. We got a good one today. I hate to raise the bar but this is a good one.

Adam Werner  00:41

Yeah. High hurdle to overcome now but yeah, today's topic. Maybe we've talked about it in different iterations here or there but I think we see it more and more often with the pre-retirees and retirees that we work mainly with, we call it the sandwich generation. Those people that feel like they're kind of caught between still having children, even if they're grown and they're adults, maybe even out of the house but still relying on some sort of financial support, while also having to now take care of your parents, who may now start to need more physical, maybe even financial care of their own. So really feeling caught between two potentially difficult situations, all the while trying to focus on your own retirement as part of that process. So there's a lot of different moving pieces as part of that conversation but that's where we're going to start today.

Benjamin Haas  01:45

Yeah, because this is the human and life side of planning that is just a really important thing to understand when we're trying to talk about, hey, here are your goals. But by the way, you're sharing with us here all the other things that you need to deal with on a day-to-day basis that making decisions over here for myself feel completely secondary to, these are the fires I have to deal with. I need to support, whether with time or with money, these kids that I raised or the parents raised me. So yeah, I guess we want to help people think about what are the ways that they can kind of say yes to their own needs and goals and not have that feel like it's making it impossible to say no to the people you really care about that in many ways, you probably feel like, rely on you. It's not good to have what feels like a selfish feeling.

Adam Werner  02:48

Yeah, I'm smiling because one of the lines that we, I shouldn't say we, that you came up with is, it's very hard to have your cake and let others eat it too. Very much feels like the situation here and you said this is the human side of what we do; there is not a spreadsheet out there that I know of, there's not a financial planning program out there that I know of, that you can plug these variables into and the tool is going to tell you, well just say no to your kid or say no to your parents and just focus on your own situation. There really is, everybody has their own personal outlook on how they want to approach these things and how do they want to prioritize them. So in our instances here, there really is, there's never a black and white. There's never a right or wrong, it truly is based on your specific outlook, then here's how we can kind of address that and it all comes down to tradeoffs which is really all financial planning really is.

Benjamin Haas  03:49

Thank you. The process is about compromising these tradeoffs. So, I would say the first piece of advice that we need to set after we probably go through a process of asking a lot of questions to try to understand what's prioritized, find a way to be comfortable, and this is way easier said than done. But find a way to be comfortable thinking like a parent with your children and that may be setting fair expectations, and just defining boundaries. So maybe that is easier to talk about with a child than it is a parent. 

Adam Werner  04:24

Oh Yeah. 

Benjamin Haas  04:25

But let's maybe throw a scenario there. Let's use child kind of boomerangs back home after being in college and isn't able to find the job or isn't financially stable. What does that now mean for you? Expectations? Boundaries? We tell people to do what?

Adam Werner  04:43

Yeah, well, the one question is this assumed to be a free ride on Mom and Dad's dime? Is there going to be an expectation that rent is going to be due? Is their expectation that they're going to cover some household expenses? Those little details just to make sure that you said it, it's clear expectations on if this is the world we're going to live in for whatever period of time, let's just make sure we're all on the same page to avoid the potential emotional conflicts that comes with just family in general. 

Benjamin Haas  05:24

Yeah, and I think with kids in this situation and that makes them sound maybe younger than they are, but with the young adults in this situation, there's still probably a responsibility on your end to be teaching them good habits. 

Adam Werner  05:39

Yeah, right. 

Benjamin Haas  05:40

That may mean trying to structure things like it's a loan. If you are supporting them, this feels like a loan that they can take out to get on their feet. Make it feel like this is the potential win-win situation that your generosity and your love and care is not taken advantage of. But in the same way, you're providing this opportunity for them to work through a period, knowing that they may have to pay that back before going on and doing the next thing that they want to want to do when they're on their own feet. So, it's a simple example I think of just not sacrificing your own good if that is going to impede on your ability to do what you want to do. If you're not helping them through excess, then you still have to kind of take care of yourself.

Adam Werner  06:26

Yeah, and so I use this analogy all the time. It's when you're on the plane and they do the safety speech, they always tell you, you put on your mask first before you put it on anybody else around you. Make sure that you're able to help those around you by making sure that you're taken care of first. That's certainly not second nature for me and I'm sure for many people, that's not how you think through that process. But I mean, that is the case here, you have to make sure that you're going to be okay because if you're not financially stable, then how can you expect to have any resources then left to help those other people that you probably want to be able to help?

Benjamin Haas  07:09

Yeah, and if we're talking about the sandwich here, the bread on both sides, I think the harder part is probably the, I can parent my kids. Everything we just said hopefully that's not too difficult of conversation. Parenting back up is a little bit more difficult. 

Adam Werner  07:27

So even going back to what you said about, if there's a loan involved, whether it's your child or I don't know, that maybe you'd loan your parents money, I don't know this scenario. But ultimately, we say, document, document, document and maybe that goes along with setting those clear expectations and defining those boundaries. If there is going to be some sort of exchange of money or something like that, that is documented. Where we see that is when there are multiple siblings involved. Well, I guess going back to your scenario, let's assume that I am actually helping to physically care for a parent. That's potentially time away from work. It's, God forbid, they don't live geographically local to where you currently live. It's time, it's money, there are expenditures that may come along with that and you extrapolate that out, you never want to have where we see the estate process. So now someone has passed away. That potential animosity, trying to get multiple siblings to agree is not always the easiest thing to do. So having some sort of documentation, having something that you can kind of refer to and maybe it is involving them on the front end with mom and dad, to make sure just clear expectations are set on, here's what we expect to happen. Here's how we expect things to go moving forward and making sure that everyone's in agreement on that.

Benjamin Haas  07:34

There's so much to unpack in what you said. That was awesome. So yeah, document, document, document. I guess we mean that on two fronts. It's not only kind of the legal things that I was hearing, like, there's going to have to be powers of attorney. There's going to have to be a will, living Wills. Make sure everybody knows the role but I think the other thing that you were saying was log expenditures, your mileage, your time, like the things that you're putting into this, if for no other reason than to try to quantify the help that you're giving. And look, I understand this is not to say that this is about the money. Helping others is usually not about the money. I just think no matter where this goes through an estate process or with siblings or even for your own, having that context is going to be helpful in future conversations and maybe it will be requested of you to share some of that information if there is some sort of estate settlement process going on. 

Adam Werner  10:06

Yeah. Yeah. 

Benjamin Haas  10:09

The other thing that you said that I'd like to pivot to, even with your own work, if we go back to how do you get yourself in a spot where you're actually trying to consider - am I leaving my own work? Am I sacrificing my own goals in order to take care of this? That's a really heavy one because I'll let you maybe take it. I think we are trained to think I can go without this pay for a little bit but there's a lot more to work than that.

Adam Werner  10:42

Oh, we've talked about that in different iterations. It's going back to my comment on the oxygen mask on the plane. If there's a scenario here, where maybe it's one or two parents needs significant amount of physical care and you're the primary caregiver. Can you financially afford to take that time away from work? That's kind of one thing and maybe the answer is yes. But I think ultimately, we would want to make sure that if you're going to make that decision, especially, theoretically, here, we're talking later in life where you may not get a do over with making that retirement decision. And we've talked about this in other iterations to the transition into retirement, people retire and kind of unretire, maybe that's a hint to a future podcast. But you don't want to back yourself into a corner now where you don't have options and you don't have flexibility. That's often where we kind of view that financial planning process to make sure that you have options to be able to make decisions that feel the best at the moment. So even making sure that if you're going to step away from work, to focus on what's personally now important to you, then go through some sort of planning exercise. Go through some projections, can I afford to retire today? Maybe the answer is yes and then that should be much greater peace of mind to now focus on the other aspect. If it's caring for family, that now you can, hopefully, confidently, take a step back and focus on what you need to focus on.

Benjamin Haas  12:28

Awesomely said because that's kind of where my mind was going. The point of the planning process is to think about those dominoes because it's not just pay. It may mean that now your Social Security is going to be less. That your pension benefit may be less. That you gave up a 401k benefit. There are dominoes to that and again, I feel bad saying these things because it's like pitting your own goal against what you feel like you want to do. But sometimes there's a middle ground. People get paid good money to be a caretaker and in the absence of you leaving that job, if mom or dad now need to pay a caretaker, maybe the Kumbaya in all of this, especially if there's other family members, is I'm going to walk away from this job but maybe at a very reduced rate. I'm going to be paid to the mom and raised caretaker because I feel best suited to do that. It works in my plan to still make a little bit of money, maybe not without all that. But my point is, you're saying document, document, document communication, communication, communication, planning, planning, we bring all these things together, maybe there can be things that work out for everybody.

Adam Werner  13:31

Yeah. When you put it like that it really is, like every other planning idea that we have, it's trying to piece these different parts of the puzzle together and that answer is going to be wildly different for different people. So yeah, I like how you kind of said that, if it's not fully stepping away and just providing care for free, maybe there is some sort of combination of being paid to give that care or it is, hey, I can't financially afford to step away from my job but I can help pay for someone to give that level of care that is maybe a professional in that circumstance. Yeah, there's just many different ways to kind of go about that.

Benjamin Haas  14:16

I guess it starts with the conversation. Question on what are we really trying to accomplish here for mom and dad or for the kids? What is the best-case scenario here? Sometimes more difficult, we found when you're looking through some sort of negativity, if it's loss of cognitive ability or stress on finances, but it is not only taking an inventory of what they have but what are we looking to accomplish? And I think this is why we get these questions. Can I afford to have mom and dad move in with us, do we put on an addition? Am I quitting my job to help out? There are so many different ways that people think about this. It has to start with what is best case scenario for you and that may not be you making all the sacrifices. 

Adam Werner  15:03

Yeah. Well said. 

Benjamin Haas  15:07

I hope that was helpful. Again, these are not often the easy conversations to have but I think if you can kind of start with, what are we prioritizing? What are we willing to compromise? Then set expectations and define boundaries.

Adam Werner  15:27

And for anybody that's maybe experiencing this themselves or has these questions at some point in the future, that's why we're here. We're here to be that sounding board. We're here to give that advice and start to put those pieces together that feel like they fit for your situation. 

Benjamin Haas  15:43

Tough to be sandwiched. 

Adam Werner  15:45

Very. 

Benjamin Haas  15:47

Alright. Thank you for your help. 

Adam Werner  15:49

Thank you.

Benjamin Haas  15:57

Hey everyone, Adam, and I really appreciate you tuning in. Please note that the opinions we voiced in the show are for general information only and are not intended to provide specific recommendations for any individual. To determine which strategies or investments may be most appropriate for you. Consult with your attorney, your accountant and financial advisor or tax advisor prior to making any decisions or investing. Thanks for listening!  Investment advice offered through Great Valley Advisor Group, a Registered Investment Advisor.