Are you being pulled in several directions when it comes to personal finances? You’re not alone. About 47% of adults in their 40s and 50s are providing for both an aging parent and a child. This group is known as the Sandwich Generation, and they face challenges with balancing their needs, their children’s needs, and the needs of their aging parents. As a result, retirement plans often take a back seat. How can they whip their finances in shape while supporting their family?
TIAA-CREF Certified Financial Planner Shelly-Ann Eweka sat down with Black Enterprise and offered the following advice:
Ask for help. Caring for your parents and children at the same time can be overwhelming, so don’t be afraid to ask for help. Seek community resources, such as your local department of aging. And you may want to schedule an appointment with a financial advisor to make sure you and your parents are on the right track. Meeting with an experienced financial advisor can help ensure that you won’t be caught off guard in the event of a family crisis.
Don’t forget to talk to your parents. If it’s likely that you or your spouse will eventually have to care for a parent, you’ll need to have a frank discussion about personal finances with your parents. Although it may be uncomfortable to discuss such matters, it’s important that you know where their finances stand in case one or both parents become unable to handle paying the bills and other day-to-day tasks. Be sure to cover these subjects:
Sources of income, debts and assets: Are they drawing from retirement accounts or pension plans? Do they have a financial advisor? Where are their accounts and how can you access them? Do they pay their bills electronically (if so, what are the necessary user names and passwords)? What’s the status of all of their debts, including their mortgage?
Insurance: It is essential for your parents to not only have health insurance, but also that you know how to contact their insurance company in case of an emergency. Ask your parents if they also have life and long-term care insurance to help defray any costs in the event of serious illness or death. If they don’t have them, you can suggest consulting two to three insurance companies to see what kind and how much insurance coverage would work best for them.
Always remember to maintain an open dialogue about your own family’s finances with your spouse. In addition to a regular discussion about your income and expenses, talk about how caring for your parents could impact your family’s budget.
Make sure to get your docs in a row: Making sure all legal documents are in place before you need them can save you time, headaches and heartaches. And don’t just make sure that your parents have all of their documents; you’ll need to do the same to protect your spouse and children. You should always have these handy:
• Durable Power of Attorney (a written authorization to represent or act on another’s behalf).
• Healthcare Proxy (a document which outlines who is appointed to make medical decisions on your parents’ behalf if they are no longer able to do so themselves).
• Living Will (a statement that describes your parents’ specific wishes when it comes to medical treatment, should your parents be unable to make these decisions during a time when it is necessary)
• Last Will and Testament (a legal document that defines how an estate or property will be managed or divided after someone has passed away).
• Access to key bank accounts and a list of doctors they currently visit (should one or both of your parents be unable to make decisions for themselves, it will be critical that you have information on all of their financial accounts as well as the ability to speak to their current physicians about their condition).
Read on for part one of this interview.