When ever I hear the term club sandwich, I think of a classic triple-decker sandwich with fries, cole slaw and a pickle, on the side. But in generational terms, the “Club Sandwich” is a generation in a real pickle. You could be anywhere from your 30s to 50s caring for aging parents, children, and possibly great grandparents or grandchildren. In some cases, its grandparents raising grandchildren while still looking after their own children and/or parents. You could be living in a multi-generational home, which is becoming more common. The Pew Research Center, a Washington-based think tank, released a 2013 report on the “sandwich generation”.
The report outlined the situation faced by those in their 30s to 50s who have found themselves “squeezed” between caring for their kids and their elderly parents. But, what the report also identified was that these challenges are no longer limited to those in 30’s to 50s. Pew analysts uncovered that 44 percent of those over 60 had lent financial support to adult children in the previous year. Hence the new term, The Club Sandwich Generation. The term has been attributed to lecturer, Carol Abaya. To some extent it’s the price we pay for living longer and having access to better health care. But it comes with its own lifestyle, and its own limitations. The Club Sandwich generation is made up of caregivers who often lose income and have additional expenses as they spend more of their time away from work attending medical visits, running errands, and cooking meals.
Sometimes, career development could be put on hold meaning a loss at a chance of promotion and salary increase. The need to fund mortgages, tuition and retirement care all at the same time can be a huge financial burden. And the danger is that parents lending too much money to their kids will leave themselves short for their own golden years. The impact of being stuck in the middle of this tripe-decker sandwich is not just financial, it has its psychological and emotional impacts as well. Disagreements at home can arise due to differences in opinion on how best to care for family members or where money and savings should be allotted and how much. Planning and compromise can go a long way in this process as it can be a tough time for everyone involved. And communication is essential. Over the years, financial planners have been working to find ways for people to prepare and cope with the situation. And once you have the financial details looked after, the emotional and psychological stresses eases.
Some tips include:
• Do not pull out money from your retirement savings
• Start a university/college savings plan (e.g., RESP) for your children
• Make sure your parents are properly insured (e.g., long-term care insurance)
• Establish a POA (Power of Attorney) and update wills as necessary (e.g.,. After any major life event or financial change)
• Continue to save and contribute to various plans (e.g., RRSPs, RESPs, etc.), despite family obligations (creating and updating your budget can help you manage what is available)
• Control spending and debt A financial plan that includes investing options, RESPs, RRSPs, insurance of all types (including longterm care, disability, critical illness, life, etc.), debt consolidation/ management, tax and estate planning, is one of the best ways to ride through this complex time and still plan for the future.
I know, I know, this sounds like more work when you’re already overloaded, but it will take the pressure off just knowing that you are prepared and have your financial house in order. So, call a family meeting and order in some club sandwiches for the event. And enjoy eating the pickle instead of being in one.
Br: Ryan Dibbley
Ryan Dibbley is Vice-President, Market Integration and Strategic Partnerships, Chief Compliance Officer, Chief Privacy Officer, Chief Anti-Money Laundering Officer at Reeves Financial Services. He has spent nearly 10 years in the financial services industry, working with some of Canada’s largest insurance providers. Ryan adheres to the highest standard of Certified Financial Planning (CFP) Code of Ethics and CFP Financial Planning Practice Standards.