The financial burden for the sandwich generation really bites
As life expectancy increases, so will the size of the sandwich generation, a group of people who care for both parents and children. According to AARP, about half are under the age of 50 and one in four is a millennial.
It’s not something anyone wants to think about and that’s one reason why so many are financially unprepared when faced with the dual caregiver responsibility.
AARP reported that by 2050, the population of people over 65 is projected to nearly double. An estimated 70% of them will need some type of long-term care.
While costs for care vary depending on state, a 2017 Genworth study estimates the national annual median costs for home health care range from $47,934 to $49,192. A semi-private room in a nursing facility runs $85,775 while an assisted living facility averages $45,000. The annual cost of adult day care is $18,200, the study said.
If you are counting on Medicare to cover all the long-term care costs, guess again. Most in the sandwich generation are forced to pay the majority of expenses out-of-pocket.
To make ends meet, an AARP study found 30% of family caregivers dip into their personal savings and 16% opt to decrease the amount they set aside for retirement.
While there’s no way to be ready for the emotional punch, you can ease the financial stress with the following tips.
Have the talk with your parents: Yes, it will be uncomfortable for everyone, but you need to have the money and health wishes talk. It’s a conversation that is best held as soon as possible, long before a diagnosis or a time of crisis. Learn as much as possible about your parents’ financial picture. Ask in-depth questions. Now is not the time to avoid asking the tough questions. From their responses you should be able to see where there may be shortfalls so you can plan accordingly.
Do your research: Look into your employee benefits. Find out what the policies are regarding everything from medical leave to flextime. Visit Medicare.gov for information about eligibility requirements, what’s covered and long-term care payment options. Learn more about long-term insurance and see if it’s the right option for your family.