Aah, you’ve finally reached the age where your children have grown up and your parents have settled into their golden years. For many, achieving this feat represents a proud accomplishment and signifies more free time to pursue professional opportunities and personal passions.
However, this time period is not always a sigh of relief for everyone. In fact, depending on the needs and ages of your children and parents, you may find yourself taking on additional caregiving duties. The term coined for this peer group faced with caring for both sides of the family tree is the “Sandwich Generation.”1
The responsibilities this group takes on are no small feat. This dual caregiving role often requires wearing many hats, which may lead to a demanding workload that can take its toll very quickly. Parents and children alike rely on the Sandwich Generation for emotional support, financial assistance, healthcare guidance, and help with daily living activities.1
Understandably, this physical and emotional workload has the potential to increase strain across all domains, making it difficult for this generation to prioritize themselves and stay on top of their own long-term goals. If you’re in this position, recognizing the challenges you may face and identifying solutions to help manage your responsibilities can play a pivotal role in easing the burden.
- Emotional Stress
Supporting the two generations closest to you can be emotionally taxing. Thankfully, society has become better at shining a light on mental health and emphasizing its importance. If you find yourself getting overwhelmed, it’s a good idea to bring trusted family and friends into the conversation to talk through your experiences. Beyond leaning on loved ones, seeking guidance from a professional can be a game-changer for managing stress levels and keeping your mental well-being a priority.
In addition, connecting with others in the “sandwich” generation or balancing similar situations can provide a great support network. Even small steps towards reducing your stress can add up to make a big difference!
- Retaining a Work-Caregiving-Life Balance
Managing your time effectively is increasingly difficult when you have caregiving responsibilities on top of your (likely already full) plate. When you’re looking after two generations at once, time management can become a true balancing act.
A 2023 survey by AARP and S&P Global reveals that two-thirds of caregivers find it difficult to split their time and energy between their work and their caregiving responsibilities.3 Of course, with multiple people depending on you for essential care and support, it is natural to experience difficulty in establishing an overall balance.
For starters, consider delegating tasks to friends and family members who can help alleviate some of the responsibilities you’ve taken on. Furthermore, try to anticipate busy times and fluctuations in scheduling where you may need to make alternative accommodations.
- Increased Financial Strain
According to a report conducted by the AARP Public Policy Institute, unpaid family caregivers spend a cumulative 36 billion hours tending to the needs of their family members. This “shadow economy” is valued at $600 billion!2 Whew!
Because this labor is not formally valued, the currency for this caregiving is your time. This sacrifice can severely limit your ability to put that same time towards a formal job, thereby potentially negatively impacting your performance – or even your income. The same 2023 report by AARP and S&P Global found that 27% of caregivers currently in the workforce had to reduce their working hours, with some even having to turn down an opportunity for a promotion.3
Unfortunately, sometimes the demands of caregiving become so overwhelming that a person must take a leave from the workforce altogether. If a person is nearing the end of their time in the workforce or has the ability to rely on support from a spouse or other source, they may choose to simply retire early to focus on caregiving. Of course, this career departure has a number of potential downsides including lost benefits, reduced contributions to 401(k) plans, and lost income.
Planning for the Cost of Caregiving
The need for long-term healthcare planning is well justified in today’s world. Although lifespan has been on an upward trajectory over the past few decades, the number of healthy years one may have left is not necessarily increasing at the same rate. According to the World Health Organization, a person who lives up to 79 may be at risk of serious disease by the time they are 63.4 With this in mind, it’s essential to create a financial plan that can support you and your loved ones’ healthcare needs as you age.
Of course, caregiving is just one aspect of healthcare that you may find yourself covering. The costs for other dimensions of healthcare can pose additional challenges, particularly if you’re on a fixed budget. And, as you or your parents enter retirement, you may be part of the majority planning to age in place. If this is the case, it is crucial to understand how to make your home suitable for your changing needs. Overall, there are many factors that contribute to a well-rounded healthcare plan, and ensuring you have a robust plan in place puts you in an excellent position to thrive throughout retirement. After all, these are the years you’ve worked hard to get to and deserve to enjoy!
Alleviating the Financial Burden
The costs associated with balancing supporting two generations can certainly build up. Thankfully, if you or your parents are homeowners aged 62 and older, you may be able to access an additional source of income tax-free funds5 to help shoulder the costs: your home equity. A Home Equity Conversion Mortgage (HECM) also known as a reverse mortgage, allows you to convert a portion of your home’s equity into cash to use however you wish – including helping loved ones with expenses, covering the cost of professional caregiving, or simply shouldering the weight of regular bills.
Because you may choose to receive your reverse mortgage funds in a variety of ways, like monthly disbursements,6 this may be an ideal financial tool for managing the financial implications of caregiving responsibilities. The role of caring for loved ones often extends for a long period of time, and by spreading out when and how you receive the funds from your loan, you can work with a trusted lender to structure your loan in a way that sets you up for long-term success.
Better yet, with a reverse mortgage, you have the option to make no monthly mortgage payments so long as you keep current with your property taxes, insurance, and maintenance. This option can give you a financial boost without introducing additional financial stress.
Utilizing a reverse mortgage to reduce the burden on the “Sandwich Generation” can positively contribute towards a more stable and joyful time together as an intergenerational family. Of course, deciding if a reverse mortgage is right for you is a personal process that requires consultation with professionals and careful consideration of your unique situation. If you would like to learn more, our team of professionals is able to discuss the process and answer any questions you may have. Reach out to the Longbridge team today!
