The term “Sandwich Generation” is used to describe a growing group of people who are caregivers for their young children and aging parents. The Pew Research Center stated that nearly half of adults between ages 40-60 are caring for a parent over 65, while financially supporting a child or children at the same time. This can be a financial burden and cause of stress, but there are several tips that Premier Bank recommends to help you juggle both responsibilities.
The Cost of Caring for Aging Parents
According to the Genworth 2017 Cost of Care Survey, the average annual cost for assisted living in the U.S. is $45,000, and nursing home care with a private room is $97,455. To put those costs into perspective, the survey found that the average price increased 4.5 percent from 2016 to 2017, the second-highest year-over-year increase for nursing homes and home care since the study began in 2004. In Ohio and Indiana, assisted living and nursing home costs currently range from around $50,000 to $92,000. And, it is safe to say that caring for elderly parents is only going to increase in the coming years.
Paying for College
College costs are rising as well. The College Board found that the average cost of a four-year education (tuition, fees, and room and board) will be $187,800 for students who entered private college in 2017, and $83,080 for a 4-year, in-state public institution.
So, how can you safeguard you and your family’s financial security while still planning for your own retirement?
Keep Saving for Retirement
Despite these financial strains, it’s important to keep contributing to a retirement fund. Otherwise, you risk burdening your children with the same financial limitations that you may be experiencing now. Saving enough to achieve your maximum company match program is a great baseline. Then, exploring tax-advantaged accounts such as a 401(k), 403(b), Roth IRA, or Health Savings Account (HSA) will help make sure you make the most of your retirement savings. As with any financial plan, Premier Bank advises you to speak with a qualified financial planner who can guide you towards the right approach for your situation.
Fund a College Savings Plan
It is never too early to open college savings plan for your child. One popular option is a 529 plan. These tax-deferred plans vary state-to-state, and you are not bound by your home state (although you may be responsible for taxes if you choose an out-of-state plan.) They have the added benefit of high limits and accept contributions from family members. If your child is old enough, get them involved in helping you make the choice to which plan is best. The sooner the better!
Consolidate Assets and Accounts
Sitting down with your parents and taking inventory of their financial holdings is a great way to start these conversations. It’s common for accounts to be spread across several institutions. Consolidating them into one place, usually, the place where you do your banking can help for later when they may not be able to remember the details. At Premier Bank, our banking specialists are always happy to sit down and talk through the options with you and your parents.
Take Care of Yourself
As many as 75% of sandwich generations caretakers are women juggling family and work. AARP shared that 60% of caregivers have full or part-time jobs and 55% report being overwhelmed by the amount of care their family member needs. Asking for help can make a difference. A good resource is the National Family Caregiving Support Program. Also, tapping into your local community for ridesharing or meals on wheels can help alleviate some of the pressure.
Premier Bank is also here to help! Learn more about our retirement plans and college saving options or contact us with your questions at any time.