Are you "sandwiched" financially and emotionally between an aging parent and an adult child? According to a recent study, nearly half of Americans in their 40s and 50s have a parent aged 65 or older and are either raising a young child or financially supporting a grown child (age 18 or older.1 Among this group, 15 percent are providing financial support to both an aging parent and a child.
While the "Sandwich Generation" is a demographic trend that has been documented for some time, the financial implications associated with caring for multiple generations of family members has been escalating in recent years, with the bulk of the financial pressure coming from adult children as opposed to aging parents. More than a quarter of respondents, 27 percent, provided primary financial support to their adult children, up from 20 percent in 2005. By contrast, just 21 percent of middle-aged adults report having provided financial support to an aging parent in the past year, a number that has not changed since 2005.
One explanation for the growing need for financial support among the nation's young adults is the toll that the Great Recession has taken on this demographic group. According to U.S. government data, the percentage of young adults employed in 2010 was the lowest it had been since 1948.
Despite the added financial resources being directed toward the young, the study found that, in general, the public places more value on supporting aging parents than on supporting grown children. Among all survey respondents, 75 percent said adults had a responsibility to provide financial assistance to an aging parent in need, while only 52 percent believed parents had the same responsibility to help out an adult child.
What can you do?
If you are supporting both a parent and a grown child there are a number of resources and support services you can turn to for help. For your parents, consider the following.
Enroll them in adult day care or hire a home health aide. Whether they live with you or on their own, you may need to consider helping them to manage medication, to conduct daily tasks such as bathing or meal preparation, and to make arrangements for assistance with household chores. A visiting nurse and home care agency may provide assistance in these areas. The average adult day-care program costs $70 per day, and a home health aide costs an average of $21 per hour.
Consider engaging a health care advocate. Professional health advocates or private health advisories can ease the burden associated with health care planning. In addition to facilitating and expediting care during major illnesses, private health advisories can also help you develop a comprehensive and customized health strategy based on your individual needs and personal health issues.
Investigate potential tax breaks. You may be able to contribute up to $5,000 per year to your employer's dependent care flexible spending account, if available, provided your parents live with you more than half the year and you pay for them to attend an adult day-care program. If you don't have a flex account, you may be able to claim the dependent-care credit on your tax return, The maximum amount of expenses to which the credit may be applied is $3,000 for one dependent or $6,000 for two. The applicable percentage of the maximum amount of expenses that you receive as the credit varies with your income, from a high of 35 percent of the maximum amount if you have an income of $15,000 or less, to a minimum of 20 percent of the maximum amount if your income exceeds $43,000.
Search online for local support services. In addition to day care and health aids, many states and communities offer other services that can help both you and your parents cope. Look online under "elder," "geriatric" or "senior" care services for support programs near you.
This column was provided by Samuel Zimmerman, a financial adviser with Morgan Stanley Smith Barney LLC in Gloversville. The Leader-Herald invites area financial advisers to submit columns. For information on how to submit one, call Tim Fonda, managing editor, at 725-8616, Ext. 277.