Wednesday, October 22, 2008

The Sandwich Generation and our next financial meltdown

I have been thinking so much about our role as members of the Sandwich Generations--being a parent of a young child, a daughter of parents reaching retirement age, and a granddaughter as well.

In our family we have a quadruple-decker sandwich in which the 90-year-olds, the 65-year-olds, and the 40-year-olds all worry about each other. (Only the kids are blissfully oblivious.)

My 65-year old parents are each facing retirement as single divorced people, and each one of them also has one 90+ year old parent living in a retirement community.

There are two trends here that I have been meaning to write about. One is that when divorced parents reach retirement, you start worrying about them in a new way, and it's like a new sequel, "The Return of the Divorce," being written. I have long ago come to terms with the emotional issues of their divorce, but now 24 years later, the practical issues are huge. Now there are two individual Seniors who each need to plan retirement, and need care, or a family member to be with them and help navigate health challenges, and they are not working with each other as they would be if they were married.

I am an only child so their "person" is me. (Often, when there are multiple adult children, one of them still ends up carrying this responsibility largely alone.) There are financial issues galore, from the fact that a displaced home-maker receives a much smaller monthly Social Security check than her former husband, to the fact that it costs a lot more to fund two households and long-term care options in retirement.

I had been meaning to blog about this last month but then the Wall Street financial meltdown took over the financial spotlight. But we as adult children of aging parents need to get these issues on our radar NOW. Unfortunately, this could be our next financial meltdown, made worse by the fact that just about everyone's retirement savings have taken a huge hit this month. had a very sad article about Boomer adults kissing their own retirements goodbye because they need to tap into their own savings to pay for their parents' care when Mom & Dad don't have resources of their own: Hello Mom, Goodbye Retirement.

This is a huge issue for married women in particular because we live longer and yet we may let our husbands "handle the finances." If we turn our retirement planning over to our husbands and they mess it up, we may be left living with the consequences for decades as widows or divorcees.

That's an ugly wake-up call to imagine, but we can try to reframe it in a more positive way for younger women by emphasizing that each of us needs to take charge of our personal financial future and save for our retirement. This need is on par with our children's college savings and in some ways is even more important. If we can help our children save enough for basic college expenses, or show them how to qualify for student loans, then the extra savings beyond that level may be better allocated to our personal retirement savings. Our children may thank us when they are 40.

I'll be writing more on this issue, but if you are willing to dive in to the issue, I highly recommend Jane Gross' New York Times blog, The New Old Age. It's written from the perspective of Baby Boomer adult children caring for their elderly parents. If you are in your 30's or 40's, these concerns are likely to come your way sooner than you think.

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Anonymous Jeanne said...

I completely agree about the divorced parents issue. My father left my mother after 39 years of marriage and now lives off of his new wife and gets a bigger SS check than my mom. My mom was a homemaker/PT worker for most of their marriage. When he left she got a full-time job working for a mortgage company but just got laid off, 2 months before qualifying for a pension. At 70 years old, with not a lot of experience and no college degree, I am not hopeful that she will find another job even though she is healthy enough to work and probably will be for another 10 years at least. Her house is paid for but taxes are several hundred dollars a month. At this point she is worried about buying heating oil for the winter. So when I think of my dad living comfortably, frankly, it pisses me off!

12:25 PM  

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