The Sandwich Generation

 David Scranton: It seems like a lot of people are feeling stuck in the middle these days or at least caught in the middle when it comes to their finances. Longer life spans and other factors have created a massive sandwich generation and many Americans over the age of fifty are part of it. The question becomes will caring for aging parents and grown children put the squeeze on your retirement plans? Yes, it’s time once again to tune out the hype and focus on the facts, facts that matter to you The Income Generation.

 

David Scranton: How does it affect the market? How does it affect the economy? Thanks to efficiencies and new technology and a staff of veteran analyst and portfolio managers Sound Income Strategies try to set new standards and bring institutional style investing to your portfolio.

It’s no secret that modern life has yes, created an enormous sandwich generation and that many baby boomers are part of it. Their feeling the squeeze of helping elderly parents with health care and other expenses while also providing financial support for their grown children. In some worse case, scenarios Americans in their fifties and sixties are bankrupting their own retirement accounts, why? To help out parents and children with no backup plan to ensure their own financial security ten to twenty years down the road. It’s a tough situation both financially and emotionally. But if you’re in this situation there are actions that you can take to address and to aprutt it and we’re going to talk about those on today’s show. Helping us will be our guest Catherine Hodder author of the Amazon best seller Estate Planning for the Sandwich Generation. My good friend and author Dee Carter and C.E.O. of Blue Ocean wealth, Margarita Chang but first, let’s talk about what the sandwich generation is for people over the age of fifty and what makes it so incredibly challenging. According to a Pew Research Center study about one out of every eight Americans or so between the ages of forty and sixty care directly for an aging parent, while another seven to ten million help their parents or other aging relatives even from a distance. Meanwhile, many of the same people between forty and sixty have grown or nearly grown children who also need some level of financial help. Now, obviously these are members of the sandwich generation and this term sandwich generation was first coined by social worker Dorothy Miller in nineteen eighty-one. And since then the number of adults caught in this generational squeeze has grown exponentially and it’s expected to keep growing as more and more baby boomers become senior citizens themselves. Thus, leaving their children yes, stuck in the middle. There are several reasons for rapid growth of the sandwich generation in recent years, some of them are obvious and others are less obvious. Improvements in medicine and health care for example, ensure that people are living longer these days that means people whose own children are grown are more likely to also have a parent still living and possibly in need of frequent or ongoing medical care. In some situations these individuals end up acting directly as caregivers for their aging parents simply because paying for nurses or other professionals to support them simply isn’t reality for them. But often, in these cases the financial savings are replaced by a tremendous amount of psychological, emotional and logistical stress as the number of people in the situation has increased throughout the years. Some communities have established nonprofit programs to help out but often, these programs are overburdened and have long waiting lists. And as if all this weren’t stressful enough changes in social and economic factors in the last decade had increased the likelihood that many adults caring for aging parents are financially assisting their grown children as well. Now, while the job market has been improving recently and in the ten years since the financial crisis it’s still true that many young adults in their twenty’s or so have struggled to find gainful employment. Including many with a college degree, many have returned to the empty nest so the nest isn’t empty any longer and their parents have ended up having them to support to some extent. Even if only for basic living expenses like food, laundry and shelter but as many parents today are well aware that can add up especially when coupled with the expense of an aging parent on the other end of it.

If you are caught in the sandwich generation you should be aware that its challenges are only likely to increase as you yourself grow older as your own health care costs increase you face the prospect of decreasing income after retirement. You also face the possibility of having limited options for generating new income in case that you’ve depleted a lot of your savings or let’s say if you’ve neglected for example, what I like to call financial defense within your own retirement investment strategies. Now, that all I know sounds pretty grim and in some situations it is fortunately, as the problems faced by members of the sandwich generation have received increasing publicity in recent years. Strategies to help deal with the problems have also become the focus of new research, this includes strategies aimed at addressing the psychological and emotional burdens of the sandwich generation. As well as the financial burdens and because those issues are often intertwined some strategies and aimed at addressing both have been created, we’re going to share some of those strategies. Along with some our own tips for helping and ensure that these burdens of the sandwich generation don’t undermine and possibly even derail your own retirement goals. We’ll start by discussing ways to keep your adult children from jeopardizing your retirement savings now, as we’ve noted on another recent show this process can be difficult why? Because many people have a psychological roadblock that prevents them from dealing with this topic. Later, we’ll look specifically at some strategies for helping your aging parents without harming your own financial future one sure way to simplify some of these strategies and improve your odds of meeting all the challenges of the sandwich generation. Is to have an estate plan in place, with that in mind let’s welcome our first guest Catherine Hodder. Catherine Hodder is a former estate planning attorney who now focuses on writing helpful articles for members of the Sandwich Generation. Her book, Estate Planning for the Sandwich Generation is an Amazon number one bestseller and she speaks frequently to groups and organizations about the importance of estate planning and protecting yourself and your family. Catherine welcome to the show.

 Catherine Hodder: Thanks for having me David.

David Scranton: I have to tell you I’m a little jealous of you.

Catherine Hodder: Yes.

 David Scranton: I am you know my own book only made it to number two on the Amazon list and you know I’m… So I might have to give our producer some business about this, I told him that we can’t have any guests who ranked higher than me on the Amazon list but I guess this time because it’s you we’ll let it slip through. Is that fair?

Catherine Hodder: Well, I appreciate that.

David Scranton: So tell us your personal story about what motivated you to write this book.

 Catherine Hodder: Well, the reason why I actually wrote this is because I am an estate planning attorney. I am in the sandwich generation and I really want people to understand how estate planning can help them. My father, many years ago had very specific wishes about his end of life meaning don’t hook me up to machines that type of thing. I told him at the time you know you need to put this in writing because I’m not going to be arguing with Mom about your wishes. And at that time he did get all his estate planning documents together.

 David Scranton: Good.

 Catherine Hodder: And then he began what became a ten year battle with Alzheimer’s and through that I learned firsthand how helpful estate planning documents can be such as who has power of attorney for finances. If he’s hospitalized for an extended period of time who is going to take care of the finances, if he’s hospitalized as well who can get information and make medical decisions when he can’t. And also at the time I was in finance, but going through that experience and then going into the practice of law I decided I really wanted to help other people understand what I lived and the fact that you are going to deal with future life events as we age. And estate planning can really help those hassles or make things less hassle.

David Scranton: And I bet it’s made you a much better attorney the fact that you live this personally you know it’s not just now you’re doing estate…end of life planning for somebody because you know you read it in the textbook and you’re smart enough to pass the bar. You know you had to go through it yourself that has to help in a lot of ways I can imagine.

Catherine Hodder: Well and you do you experience things that you say oh, I assume this (unclear 09:50 ) power of attorney will you know that you get online will work anywhere but then the bank that takes it and says Well, now we need our legal department to look at it and then. You step back and realize like well actually a (unclear 10:05) power of attorney specific language that a bank will be comfortable with meaning if they follow the instructions they’re not going to be sued. So you know there’s a lot of things that you may I guess assume would happen if you did certain things and you come to find out that you know especially with stringent hippa laws trying to get information

David Scranton: Now we’ve got about forty-five seconds left to the commercial break and in that time give us like two of your top piece of advice for helping with parents who might be becoming ill. That top part of the sandwich because then when you come back after the break I want to talk about the children.

 Catherine Hodder: Right, well you know for the parents having… I would think number one, first is communication finding out what plans they have? What estate planning documents they may have or may need to get especially with regards to health care decisions and with our two finances.

David Scranton: Number one.

 Catherine Hodder: The second piece is really and this is I found extremely important for most families to have one place where you have financial legal and medical information. We would give it to our clients and call it a 911 binder meaning when you got a call from a hospital you know exactly where your healthcare power of attorney is on your parents so you can then go talk to the doctor. If you need it to pay bills or taxes you have the financial power of attorney that you can go to the bank, you have a list of their medications you knew where their safety deposit box was.

 David Scranton: All in one spot that’s great. That is great advice we need to take a quick commercial break stay with us, we’ll be right back with Catherine Hodder.

If you are near or in retirement head over to The Income Generation dot com and download your special report written specifically for the needs of the income generation. Again, those with born before nineteen sixty-six. I’m David Scranton and you’ve been watching The Income Generation we’ll see you all next Sunday. This is fun, this is a great three, two, one but I’d like to take a few seconds and tell you why I decided to write the book entitled Return on Principle. Basically it all boils down to this, let’s face it you deserve to live a happy retirement, it’s as simple as that but for many the subject of money, finance and math is complicated. Here’s a fun fact, many Americans claim that they’d much rather clean a toilet than calculate a tip in a restaurant thank you like I guess. But it doesn’t have to be that complicated, using the seven core values I outlined in my book you too will be able to build a life based upon the right core principles. Return on principle isn’t just a book about financial investing, it’s about investing in your life I know for a fact that you’re going to love it. Okay, now it’s just getting a little weird here.

A recent Pew Research Center survey found that sixty-one percent of parents in the great United States of America admitted to helping their adult children financially. While no parent wants to see his or her child go the hard truth is that when parents put their child’s financial needs ahead of their own it can be an absolute recipe for disaster for all involved. You’re probably familiar with the recent story about Christina and Mark Rotondo, The New York couple who sued their own thirty year old son in order to get him to move out of the house. And naturally no family wants to end up in a situation like this and there’s really no need to in fact, there are a number of steps that you can take for the benefit of everyone involved. Especially when dealing with this particular side of this generational sandwich such as these strategies shared recently by Forbes number one, have a clear understanding of your own financial needs and retirement goals. If that sounds familiar it may be because you’re regular viewer and you’ve heard me discuss the importance of identifying your specific retirement goals many, many times. In the situation do it with an understanding that this process will ultimately lead to a frank conversation with your son or daughter about what kind of help you can and cannot offer. Based primarily upon your own budgetary restraints and personal goals that you and or you and your spouse have identified. Next, be honest, be brutally honest in identifying your needs and goals and communicating with your children consider important questions such as Have you saved enough for any unexpected health care expenses? Keep in mind that the cost of health care rises at a faster and steeper inflation rate than the overall rate of inflation. Or are your savings on track to support the lifestyle that you envision for your own retirement? Understand that as a general rule you need to replace at least seventy percent of your pre-retirement income in order to maintain a similar lifestyle after you stop working. Another important reason for being brutally honest is this, by showing your children that you have a clear understanding of your own financial goals and that you’re committed to accomplishing them. So it’s a great example for them that they can follow so be very specific about the kind of help you can provide and can’t provide and for how long. Lead by example, it’s in your own best interest and your children’s and it will help prevent problems that hurt feelings down the road. Number three, consider bringing a professional into the mix, working with a professional financial advisor ideally one who specializes in retirement income planning can bring some much needed objectivity into the mix. And help defuse any emotionally charged elements of the situation. Having a professional go over the budget with you can help your children understand that the issue has nothing to do with your personal relationship with them. It’s simply a matter of dollars and cents, it also sets another good example by showing how working with the right advisor can improve their odds of financial success also down the road. And finally, put everything in writing and review your progress regularly. This will help to ensure that both sides have the same expectations and reviewing the agreement frequently will allow you to see whether it remains reasonable or it needs to be adjusted over time. For example, maybe your child has received a raise at work or even occurred unexpected medical expenses whatever the case. Your son or daughter should know that if the circumstances change you would expect them to be flexible and to understand that your commitment to supporting them might have to change accordingly. Without a doubt financial conversations with family can be difficult but, when it comes to addressing this particular challenge of the sandwich generation you can make the conversation less difficult and more successful by following these four strategies. Identify your own financial goals and needs, be honest with yourself and your children, work with a professional when appropriate and yes, put everything in writing and review it on a regular basis. And now it’s time to welcome back Catherine Hodder, author of the number one Amazon best seller Estate Planning for the Sandwich Generation. So Catherine you gave us some good advice for the top end of the sandwich the parents and about communicating with them on the estate planning side. Making sure the documents are squared away and then also having everything in one place, very important because you never know when something’s going to happen. But now let’s talk about the other part of it that is even a little more emotionally sensitive perhaps and as those adult children who perhaps aren’t quite financially self-sufficient yet.

Catherine Hodder: Right and you know self-sufficient or not estate planning is something you should really look at where your children are. So for example, with grown children you know they may have left your nest but if they are in another state and get injured or hospitalized. How are you going to get information on them or be able to make medical decisions for them? It’s a good idea to have a health care power of attorney for them and also if you have minor children you should be able to name guardians for them so that should something happen to you, you have made the decision of who would take care of your children. Not leave it up to a court that doesn’t know you, doesn’t know your children and doesn’t know your family dynamics.

 David Scranton: But what’s the best way then you know let’s say that I’ve got a child that’s in my house and tried to find a job. Couldn’t quite pull it off, need some financial health maybe there’s just some reason why they’re never going to have really extremely high earnings potential. And I want to make provisions for that person and I know it’s different for everybody in terms of how they structure their estate plan. But what are a couple simple things that people should be considering at least in a scenario like that?

Catherine Hodder: Well, if your real concerns about a child being able to manage money especially if you’re talking about inheritance you know like you don’t want a child who really can’t manage money to come into a whole bunch of it. So there’s things you could do within wills such as create a spendthrift trust, other… and you can also set up a living trust or called a revocable trust. Where they’re the beneficiary but they really can’t pull out the money themselves, you would make the money available for things like maintenance, support, health care, education. But you know if they wanted to get a car the trustee that you would name who would handle the money would be saying let’s look at a Honda rather than a Ferrari.

David Scranton: And just so people know the primary reason for a trust really is you know if you’re in a law school studying this stuff as you were. The primary reason is to be able to manage your money from the grave so, isn’t it true that with a good estate planning attorney you can get really creative? For example, you can say okay, I want to motivate my child. So every dollar that they are in a given year they can match that dollar with an equal withdrawal from the trust in almost like matching on a 401K. So you can get fairly creative with trust isn’t that one of the big benefits?

 Catherine Hodder: Yeah, you absolutely could but one thing I would like to caution viewers is that we like to say even though you can rule from the grave think about what those rules are. So for example, it may be very important for you, for your child to attend college but if something happened to you and the trustee is there to figure that out. What if your child is wildly successful as a chef and wants you to culinary school? Does that qualify as a college? What if they’re a terrific inventor like a Bill Gates and they you know really want to pursue an invention that they’re doing, I mean you really don’t want to you know give them sort of golden handcuffs.

David Scranton: So it sounds like…

 Catherine Hodder: So it should be something really…

 David Scranton: It sounds like what you’re saying is you need to make sure you think it through thoroughly because if you’re trying to use a trust for managing money from the grave. Then and if you don’t think it through thoroughly it’s always going to be the one thing you didn’t think of that’s going to be the gotcha and that’s good advice. Unfortunately, Catherine we need to leave it there we’re out of time thank you for being on the show.

Catherine Hodder: Okay. It’s a pleasure it’s a lot of fun.

 David Scranton: Alright stay with us, we’ll be right back here on The Income Generation. We’ll be right back. If you’re not using someone who is well trained in fixed income and you’re born before nineteen sixty-six. It may just be time for you to break up with that advisor and move on, I would suggest someone who will care for you through these important years of your life. If you need help finding someone call or write us. I’d also like to remind you of the special report titled The Income Generation this available free to you our loyal viewers online. If you haven’t downloaded your report pick it up after the show. I’m David Scranton and you’ve been watching The Income Generation. We all want to live to a ripe old age and increasingly more and more of us are doing so. The average life expectancy today in the United States is seventy-eight point seven years compared to sixty-eight point two years in nineteen fifty. But by some estimates that rate will increase past age eighty by the year two thousand and fifty and generally, speaking this is pretty good news. But the fact that old age is also often accompanied by declining health and the need for increasingly expensive health care, creates a host of challenges for society as a whole. And for many individual families, it was only a few years ago that my own dear mom passed away and I was grateful for all the years that I had with her. Today many of my friends in their mid to late fifty’s and probably yours too have parents who are still alive and in many cases those friends might be helping their parents financially. In fact, according to a recent Care dot com survey nearly one in four Americans help support a parent financially. While that’s admirable, it can also be unfortunate when it creates a financial hardship for the child. One of the most common reasons for hardship occurs in that families don’t discuss the issue until after the hardship becomes obvious or absolutely unfixable. As with any issue involving your money, the key to avoiding problems lies in planning without a well thought out plan in place you could very well end up facing multiple problems all at the same time. Having to cover large unexpected medical bills, having to settle for subpar care for your parents or of course, depleting your own retirement savings and all of that is in addition to the arguments, the worry and the emotional stress of the entire situation. So, instead of waiting until you’re in this situation take action now, starting with the following simple steps. First have a frank conversation with your spouse while your parents are still wholly or mostly independent about the possibility of having to help them financially should they need it. You and your spouse are in this together after all and it’s important to make sure that you’re both be on the same page if and when this issue arises. Make sure that you discuss helping out both sets of parents if that’s applicable, next have an equally frank conversation with your parents about their financial situation, their health and their goals. As well as their expectations for the coming years. Now, that one should seem obvious I know but let’s face it many people avoid having this conversation why? Because it can be uncomfortable. Children might be afraid of learning their parents finances aren’t as stable as they thought and the parents might be afraid of letting their kids find out and realizing that they might become a financial burden. Which clearly no parent ever once nevertheless, it’s better to face those fears early and to identify potential challenges ahead of time. While there’s still plenty of time to address them and to fix the situation with that in mind my final tip is the same one I shared about having a financial discussion with your own grown children. And that is to consider bringing in a professional into your mix, someone who’s qualified, a qualified financial planner specializing in retirement planning. That person if they’re good at what they do can improve your odds of avoiding the financial problems associated with supporting an aging parent in many different ways. First, they can help ensure your calculations and projections are accurate and realistic too, with a professional’s knowledge of the financial markets and the economic factors that impact retirement. They’ll help you determine your parents’ needs and also to what extent you might be able or may not be able to help them without jeopardizing your own retirement goals. Second, they can help identify potential options and alternatives for helping your parents that you might not know about things such as special programs and tax even strategies. And finally, as in that meeting with your own grown children is really where a professional advisor can help bring a kind of a clarifying element of objectivity. The entire process and lessen any discomfort or distracting emotional elements that inevitably are going to be there. That just one more reason why it’s worth the time and effort to find the right financial advisor and I provide a number of tips on how to do just that in my book Return on Principle. Which is available as many of you know on Amazon now, I’d like to bring on my good friend and fellow author Dee Carter. Dee Carter is the founder of Carter Financial Group in Midland Texas, he also is a repeat guest on The Income Generation. You might recognize him and one of my absolute closest friends, he’s a past winner of the National Association of Insurance and financial advisors lifetime achievement award. And the host of his own popular weekly radio show his new book is called It’s Now or never, how to enjoy your life and not let your investments own you. Dee, welcome back to the show.

 Dee Carter: Thank you very much Dave. It’s good to be back.

David Scranton: You know of course, we’re talking about this Income Generation, this sandwich generation that a lot of people find themselves in taking care of older parents, taking care of adult children who may not be quite self-sufficient yet. You know tell us about maybe some things that are in your book that might help these members the sandwich generation that are in the middle. In terms of giving them some good advice that could help them get through this difficult period in their lives.

 Dee Carter: You know one of the best things they in do is consult somebody that has been there. I… one of the reasons I wrote the book was to give some of the illustrations that I had children in college, I had older parents. I had a mother who was in a nursing home so I’m taking care of one generation and I’m taking care of the other one on the other side of me and the only way I could have done it was to make sure that I had the funds necessary to do so. And I’m not consult someone to help me, even us advisors we need someone (unclear 30:02 ) got to tell us what we’re doing right or wrong and I even went to somebody else to check to make sure I was doing the right thing. But the real best advice I’ve given is to find someone that you can depend on, someone that you could really trust and someone that you know you feel very good camaraderie with. And sit down and tell them your whole story, give them the whole truth nothing but the truth so help you God and literally let them guide you. Because the only way you’re going to get there is to have someone really take a good close look at where you are.

David Scranton: So since we only have about a minute and a half left tell us about your book. Tell us about how you teach people not to be a victim of their money, how to control their money and use it for good versus being reactive.

Dee Carter: Well, one of the things I did is try to point out the difference between wealth and income Dave as you so well pointed out in your books. But what we try to do is to teach them that there’s a difference between growth and income and get them to understand that with income situation you can certainly take care of yourself quite capable. And make a really good return on your money and not have to worry about the ups and downs of the stock market, one thing I try to do is take them as much as I possibly can away from the risk area as much as we can. There are some areas that we would like for them to stay in obviously but we try to take them as close as we can to the edge where they’re getting that low amount of risk and the best return possible. So they can go to bed at night and sleep and also guess what they can get up and enjoy their lives the next day and not have to worry about.

David Scranton: You know so I guess you’re right if it’s… if you’re in the stock market your money controls you because if you’re counting on taking withdrawals for your income, your cash flow and the market drops. Well now your whole lifestyle changes or you’re forced to spend principal or go back to work, your money controls you. But if you’ve got that check coming in every month then you’re in control so, your final fifteen minutes of words of wisdom for those members of The Income Generation over the age of fifty or I should say fifteen seconds of words of wisdom.

Dee Carter: The best I can give is this, make sure you have a plan and if you don’t have a plan you’ll never know when you get there. Sit down with someone and get yourself a plan something to go by a blueprint to know when you’re going to get there or how you’re going to get there and what you’re going to do when you get there. And how much you’re going to enjoy it because that’s really all it’s about. 

David Scranton: Now you know why Dee is one of my best friends in the whole world we’re kindred spirits. Dee, thanks again for being back on the show and you stay with us we’ll be right back here on The Income Generation. If you’re not using someone who is well trained in fixed income and you’re born before nineteen sixty-six it may just be time for you to break up with that advisor and move on. I would suggest someone who will care for you through these important years of your life. If you need help finding someone call or write us, I’d also like to remind you of a special report titled The Income Generation. This is available free to you our loyal viewers online, if you haven’t downloaded your report pick it up after the show. I’m David Scranton and you’ve been watching The Income Generation.

Just a recap, it is important to remember that we start this pre-retirement stage when you’re still in the accumulation stage of your life. And we might even be willing to take a bit of risk with our investments in the pursuit of more growth, we don’t necessarily at that stage need the income yet after all. And if the market tanks and we suffer a loss we know we still have time on our side to recoup from that loss and that is all very reasonable. But one of the greatest dangers of the sandwich generation is that it can cause you to stay stuck in this accumulation stage. And in this mindset for a lot longer than you should, one reason is that the financial demands of helping aging parents and grown children are compelling many baby boomers to delay retirement. Last year thirty-two percent of Americans age sixty-five to sixty-nine were still employed according to the Bureau of Labor Statistics. That number is expected to jump to thirty-six percent within the next six years and while yes, it’s true that many people are still working not just for financial reasons but because they enjoy their work. The danger is still this, remaining active or even planning to remain active in the workforce increases the odds that you may just neglect to make the necessary shift from the growth phase of financial planning to the income phase. From the accumulation phase to that phase of income and protection psychologically yes, it’s understandable if you’re still working and supporting children and your parents are still in the picture. It probably feels like you’re still in the same stage of life you were twenty years ago and it’s easier to forget or neglect that fact as you’re getting older also. But by short changing or by neglecting your own financial security in retirement you’re increasing the odds that your own children are going to end up getting caught in the sandwich generation themselves. In that squeeze in the middle increasing the odds that you’ll eventually become a financial burden to them and again, I know that’s something that all of us agree that none of us wants. Now, I’d like to welcome Margarita Chang to discuss her article that took Kiplinger’s by storm about the sandwich generation. Margarita Chang is C.E.O. of Blue Ocean global wealth and a frequent contributor to many top financial publications. She often speaks to groups and organizations on a variety of important financial topics including social security, elder care and yes of course retirement. She recently published an article for Kiplinger called Advice to the Sandwich Generation. Margarita, Welcome to the show.

Margarita Chang: Thank you so much for having me.                                                                                            

David Scranton: You’re very welcome. So this is obviously an important topic for you within the financial planning world and I find that a lot of times people have real life stories that make this concern about the sandwich generation really something that’s important to them personally. Are you in that group where you’ve had personal experiences that motivated you to make this kind of sort of an area of expertise within your own business? 

Margarita Chang: Absolutely, so this is a very important topic for me personally and professionally because I found myself sandwiched. At the time I was caring for my youngest child who was eight and my dad who was eighty, who had Parkinson’s disease so this is a topic that really hits home for me. And I take every opportunity to talk about it not because I think I’m so great, but I think it’s a topic that affects many people.                                                      

David Scranton: And it does yeah. It really, really does so you know what was the toughest…what did you find was the toughest part in your case you know normally we talk about sandwich generation we’re talking about an adult child who hasn’t flown the nest yet. In your case it wasn’t just gee, I feel emotionally obligated to take care of an adult child that’s graduated from school it was that it was an eight year old child you really had to do that. So you know what was the toughest part of this for you? Was it the emotional side? Was it the financial side? Talk to us about this because it’s not all about the money right?

Margarita Chang: Correct, it’s not all about the money so at that time my youngest child was eight, my middle child was fifteen and my oldest child was seventeen so I have two kids in high school.

David Scranton: So the story gets deeper. Three children okay.

Margarita Chang: It does and then my dad’s health started to decline. I think the most stressful part really wasn’t my kids it was observing the decline in my dad’s health. I am very proactive, I am a certified financial planner and early on I did encourage my parents to plan. We started talking about this when my mom was fifty-three and my dad was sixty-eight so my dad… 

David Scranton: Let me ask you Margarita though were you a caregiver also helping your dad personally in addition to financially. 

Margarita Chang: So my parents were fine financially because we did planning. I did provide caregiver supports, my parents had long term care insurance so cost really wasn’t so much an issue and for that I’m grateful. But it’s still a very emotional and mentally exhausting for caregivers and being sandwiched of course there’s the financial impact but what makes it so stressful is you are observing a loved one experience a decline in health. 

David Scranton: At a time when you’ve got teenage children you need to spend quality time with them and make sure they grow up right but you also want to spend the time with your dad. So we need to leave it there for the segment we’ll be right back to talk with you more and you stay with us we’ll be back on The Income Generation. And a previous episode of The Income Generation we shared a step by step strategy for answering the question. How much money do I need to retire? You need to determine the exact dollar amount you’ll need for your own retirement goals regardless of the level of support you provide your parents and children. If you don’t get comfortable with that number and what it is and then you know your family will continue to expect things from you possibly that maybe you can’t quite oblige. You could be jeopardizing your own entire retirement and now it’s time to welcome back Margarita Chang. So, Margarita you know talking about this issue with your dad and your teenage children, your eight year old you know what are one or two things that you can share with our Income Generation members. That maybe you learned or that you wish that you had done better so that they can learn from everything that you’ve been through.

Margarita Chang: Sure, so I would say encourage caregivers to find time to care for themselves. It is okay to be a little bit selfish because you’re also being very selfless, I’m not talking out of both sides of my mouth. What I mean by this is sometimes if your dad or loved one I’m saying my dad if it was me has been in the hospital and you don’t have time to cook it’s okay to get carry out. Or if people ask how they can help its okay for you to accept help it is not a sign of weakness, we have all been in that situation so that’s what I would say. I think that’s very helpful the second tip don’t do anything drastic, don’t quit your job. See if you can work from home, talk to your boss but the most important thing is for you not to do anything drastic with your finances.

 David Scranton: Yeah, absolute that’s very good advice it’s like anything else. Now as a C.F.P. you know in the forty-five seconds or so we have left in this segment as a C.F.P. are there any asset allocation changes you think people might want to make as they get you know. As they get these extra liabilities thrown on them and I know you can’t give specific recommendations because we’re talking to a whole television audience. But what would you say to that?

Margarita Chang: So sure, I mean I would say if you think your parents are… or a loved one is going to need help you know my recommendations is to have some extra cash reserves. Normally we stay six to twelve months hey, it’s okay if you have closer to eighteen months or even twenty-four months. Just to be prepared for airplane ticket or needing to provide support for loved ones.

 David Scranton: So have a little more cash on hand and if you think you might have to dip into things beyond your cash then you might even need to consider lowering your risk a little bit. At that time to make sure that you know you don’t get stuck taking withdrawals in a down draft. So, Margaret it’s been very helpful today I am really glad that you made the time to spend with us thank you.

 Margarita Chang: Thank you.

 David Scranton: And you stay with us too, I’m grateful for each and every one of you our loyal Income Generation viewers. Stay with us we’ll be right back with more here on the Income Generation. I’d like to thank all three of our guests for joining us today for another episode of The Income Generation and I also want to thank you our new and returning viewers. You know for most of us nothing is more important or meaningful than our family, if we’re lucky we have good parents that we love and good children and possibly grandchildren. But in the modern age the affection we have for our families can be complicated by some hard fiscal realities. Longer lifespans, rising health care costs, economic uncertainty and a tight job market are all some of the factors. Put them all together in a big blender and push the button and you have two generations facing a host of financial challenges. And another generation stuck in the middle, the good news though is that our generation. The Income Generation has the opportunity to help break a vicious cycle that’s been building and growing now for over thirty years, you don’t have to pass this generational squeeze down to your children. You don’t have to sandwich them between addressing the financial needs of their children and yes, of your needs too. You can break the cycle by focusing first and foremost on your own needs and goals right now and by making sure that you have a financial strategy that provides the protection and income necessary to achieve those goals. You can pair that focus with open communication and frank conversations as we’ve heard from all of our guests with your loved ones, parents and children. Creating boundaries and realistic expectations that work toward everyone’s best interest long term and you can recognize the importance and value of estate planning as a means of protecting your entire family from one generation to the next. Which yes, can help you avoid a lot of unnecessary stress and emotional anguish. So, if you’re feeling the sandwich generation squeeze yourself try to step back for a moment and try to see the big picture. If you’re a member of The Income Generation over the age of fifty and haven’t yet thought about making the strategic shift from growth to protection and income. Recognize that it’s probably time, recognize that like everyone else you too are getting older. Thanks for watching, and if you’re close to retirement and you really want to know how to protect and maximize your money it’s absolutely essential to stay informed and up to date. And yes, right here is where you could do it every single week on The Income Generation. I’m David Scranton and thanks again we’ll see you next week. If you are near or in retirement head over to The Income Generation dot com and download your special report written specifically for the needs of The Income Generation. Again, those born before nineteen sixty-six, I’m David Scranton and you’ve been watching The Income Generation.