The Sandwich Generation

By - The LSG Team

When my kids were teens we visited the LBJ ranch.  During the tour, the docent talked about the huge philosophical gulf that existed between young people and adults during the Vietnam War.  Later, my kids asked me more questions about the so-called “generation gap” and I was surprised they didn’t know more about this phenomenon that seemed so prevalent when I grew up.

This eventually led to a conversation about a more contemporary generational challenge; one in which I find myself, and one that many of you may also be experiencing. I described myself to my boys as a member of the “sandwich generation” – a generation of people who suddenly find themselves responsible for managing or overseeing the financial affairs of their parents at the same time they are trying to send their own children off to college.

At Lucien, Stirling & Gray, we don’t often label discussions as talks about the “generation gap,” or “sandwich generation,” but often we do talk about having inter-generational discussions. Nevertheless, these talks still can be fraught with anxiety and misinterpretation, just like the strained talk between the generations in the late 60s and 70s.

For illustration, I had a discussion with a client this week about her mother’s situation.  Her mom is 87, lives independently and manages all her own money – a significant amount of assets – in a completely self-directed account.  Clearly, she is competent and capable of managing her own money. She executes all the investment and money management decisions – the buying, the selling, and the distributions. Obviously, it’s a plan that works… until it eventually doesn’t, and that was my client’s concern.

One question I raised was whether she knew if her mom had her Required Minimum Distributions from her IRA account automatically distributed and deposited into her checking account.  My client was unsure.  It wasn’t hard for her to imagine a scenario where Mom might fall and break her hip, and in the confusion of events, might lose track of handling all the critical details of her finances.  If such a scenario were to happen, my client expected to find herself responsible, and the penalty for not taking a Required Minimum Distribution from retirement accounts is 50%. This is one of the topics that I encouraged my client to discuss with her mom now, so that she can better understand her mom’s overall financial situation and be better prepared when responsibility falls to her.

Just as we yearned to be heard, respected and empowered as young people, our elders want the same as they age.  Think back to how you felt as a young adult – wanting to be heard, wanting independence, but scared and feeling vulnerable. Relating to those feelings may be a place to start in talking to your parents as they age.

These conversations are difficult.  The first step is to have the courage to start the conversation.  Do it now. Don’t wait another five years.  I promise it won’t get any easier later. Think about what you want to accomplish – Is it fact finding?  Is it listening to their needs and concerns? Is it expressing your concerns?  Remember – You aren’t going to solve everything at once.

Avoid the parenting role.  Parenting our parents is not a recipe for success.  They will always be our parents.  Instead, try more for partnering with your parents. Ask questions and listen, even when it is hard.

Think about who to involve.  Sometimes it is better for one adult child to talk to the parents.  Sometimes all the kids need to get involved. But you don’t want anyone to feel like they are ganged-up-on.  Ideally, it would be great for all the adult children to agree, but don’t wait for consensus.  Start with the idea that we are going to have a conversation, but it will be one of many.  Start to plan, but know that things will change.

Some conversation starters:

“We were talking to our financial advisor about our retirement plans and it got me wondering…” 

Tell a story.  They are easy to find.  “I was talking to my friend Chris and his parents have decided to move to Westminster, and they are selling their house in Shady Hallow where you live…”

Bring up other relatives or friends. It is so much easier to be a bit more candid and objective when you talk about other folks.  See if you can prompt discussion about what your parents think of someone else’s choices.  “Your Aunt Jean waited way too long to move…” Pick up on that and ask what they’d do differently, and why?

One way to help your parents is to ask about their banking. So much of banking is now done online. For a generation who did not grow up with computers it can be daunting.  Do they have direct deposit for all sources of income?  Do they still get paper statements?  Would it help them if you set up online banking?

I went with my Dad to the bank and we consolidated accounts and closed some old saving accounts.  We also provided the bank with a copy of his Power of Attorney.  Then we set up online banking, so I could see and help track his financial transactions.  Even though Dad didn’t want to look at anything online, it helped me to help him.  Then, if a time comes when he can no longer write checks, I can instantly and easily step in to help.

Most people don’t have these conversations until a crisis hits.  They fear resistance, conflict, rejection and disapproval.  This disapproval not only comes from the parents, but often from other siblings.

We fear the disapproval, but we should fear the crisis more. If my personal experience is in any way representative, it is coming. 

As advisors, part of our role is to help clients plan for the future; to see clearly what stage of life they and their loved ones are in now, to understand where they are headed, and to prepare now for those eventualities.  It isn’t as easy as it sounds. Some of it involves making financial decisions, but much more of it involves confronting highly emotional decisions.  We bring up the discussion of moving to senior living and getting household help to ease into the next transition.  We talk about simplifying the financial process. But, as I told my own 80-something parents, “It is so much easier to plan a successful transition when you are not in a crisis, than it is to have to scramble to find a place to live and handle a thousand other details in a rush after a fall or a stroke.”

Have the courage to have the conversation.  We can help.