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Financial Tips for Sandwich Generation Caregivers

By Dana LarsenAugust 29, 2015
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Those of us who are members of the “Sandwich Generation” may not have expected to find ourselves in the position of helping to provide for our elderly parents, nor may our parents have anticipated needing our support at this stage of their lives. Whether the recession, lack of financial planning – or a combination of factors – had something to do with it; sometimes difficult decisions have to be made when it comes to ensuring proper care for aging parents.

Sometimes financial safeguards thought to be in place, such as government programs, don’t always end up providing the security that was expected. For example, those receiving Veterans’ Benefits in some states may not be eligible for Medicaid government assistance, even though Veterans’ Benefits may not be sufficient to fund necessary assisted living and/or home care. Some veterans and their surviving spouses are eligible for a supplemental VA pension, which could provide extra benefits for veterans and survivors who require some forms of long-term care. If your parent receives Veteran’s Benefits, you may want to see if they may qualify for the supplemental pension, as well.

Sandwich generation caregivers sometimes have it most difficult as they can feel the financial burden from both their kids and parents. If you find your parent slips through all the cracks of long-term care funding options, you may need to get creative to find ways to pay for care.

Creative Senior Care Funding Options

Funds can sometimes be especially tight for sandwich generation caregivers. Here are some senior care funding options your family may consider if you’ve exhausted other, more traditional, financing options:

  • Estate sale: Your parent may consider holding an estate sale to clear out furniture, household items, and assorted small possessions that are no longer needed. These sales are doubly helpful because they earn money as well as reduce the amount of things to be disposed of or otherwise distributed down the road.
  • Use investments: If your parent has any investments, this is the time and place to use them. Rather than cashing everything in, however, they may be able to sell an investment gradually, thus extending its lifespan and earning potential. Besides, a big sell-off could trigger a large and unwelcome tax event. An investment advisor can provide guidance on how to sell out of a portfolio in a way that will best meet your parent’s financial needs.
  • Sell big-ticket items: Many people are naturally hesitant to sell valuable possessions, such as their house or car (or other family valuables). However, there may not be any easier options for easing your parent’s financial burdens at this point. And sometimes it’s necessary to reconsider whether your elderly loved one should be driving, making the step more natural. You may need to have a tough conversation about taking this step if you’ve exhausted other financial options.

Steps You May Be Able to Take to Help Your Parent

  1. Have them live with you: Rather than entering a care facility, your parent may be able to live with you and receive skilled nursing care in your home. If the burden of paying for care falls to you, this could be a far less expensive option than a care facility, but realize that you may also find it to be far more demanding emotionally, physically and even logistically.
  2. Re-budget: In order to financially assist your parent while continuing your own retirement saving efforts — and potentially saving for your children’s college expenses — you may need to tighten your budgetary belt. Areas of expense that can be easiest to trim include dining out, recreation, cable, clothing, personal care (hair styling, makeup, etc.), and similar discretionary spending. Don’t stop saving for your own retirement. If you do, your children may find themselves having to help support an aging parent someday.
  3. Enlist extra help: You may have to enlist siblings or relatives who can help with the expense. And your children may have to help save for college with their own weekend jobs. Picking up some extra income doesn’t have to be complicated or even related to your primary job — working in retail, mowing lawns or selling things on Etsy all can be good ways to earn extra money.
  4. Claim your parent as a dependent: There’s no guarantee, but under some circumstances, you may be able to claim your parent as a dependent, which can help financially.  Every situation is unique, so check with the IRS to see whether this may be an option.

Sadly, there’s no magic solution to the money issues we and our aging parents face, whether or not they are eligible for Veteran’s Benefits. That being said, if you’re not facing these types of struggles yet but may someday, work with your parents now — immediately — to look into long-term care insurance. The right policy could save a lot of money in the long run.

Has your family come up with any creative ways to save money or help fund either long term care or college graduation? Sandwich generation caregivers often need to be creative when it comes to balancing budgets. Please share in the comments section below.

About the Author

Providing unbiased, fee-based investment advice and asset management with a focus on doing what’s right for its more than 34,000 clients, The Mutual Fund Store is a nationwide system of registered investment advisors, which include affiliated companies and independently owned and operated franchises. Individual Stores are SEC or state registered investment advisors. Advisors actively manage personalized investment plans, extensively researching and expertly monitoring the mutual funds selected for clients. Each Store can offer investment advisory services to prospective and existing clients in the state where the Store is located, while a number of Stores may also offer advisory services in nearby or other states. The advisor may not transact business where it is not appropriately registered, excluded or exempted from registration.

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Dana Larsen