The sandwich generation has it bad. Wedged between their aging parents and children, these folks are caught in a perennial struggle to cope with the needs and demands of both generations.
More and more adults are feeling the squeeze as they find themselves stranded in between the three-generational sandwich. People are living longer into their 80s and 90s, and couples are starting families at a later age.
Becoming a parent to aging parents presents extraordinary challenges that can wreck you emotionally and financially.
Women are particularly affected by the sandwich generation dilemma, often due to traditional gender roles in which women are more likely than men to shoulder the burden of elder and child care, even if both spouses are working.
A survey by the American Psychological Association (APA) found that mothers in the sandwich generation between 35 and 54 years of age are more stressed out than any other age group.
While nearly two in five men and women in this age group say they feel overextended, the survey showed that more women reported experiencing extreme stress and say they manage stress poorly. Some 83% of mothers say relationships with their spouse, children and family are the top causes for stress. Unfortunately, stress is a proven precursor for chronic health conditions such as depression, diabetes and heart disease.
This is on top of the financial concerns that entail caring for your parents’ health, putting your children through college and saving for your own retirement.
If you are part of the sandwich generation, there are a few things you can do to lower your stress level and increase your peace of mind. Here are some strategies to help you cope better with the pressures of the sandwich generation.
1. Preserve your assets
First things first, if you are already feeling the strain of the sandwich generation, the most important thing you need to do is to preserve your assets. This means you should avoid draining your retirement savings to pay for your children’s education or your parents’ long-term care.
Your college-age kid can consider getting a study loan from the National Higher Education Fund Corporation (PTPTN) to fund their tuition fees and other related expenditure while they are studying.
Your parents may have their own assets, which you may use to help finance their care for as long as possible. You may even consider trimming your household expenses to a more manageable level to fit your financial plan.
Remember you will no longer be eligible for any financing facilities after retirement, so it is imperative that you look into options that will help promote financial sustainability in the long term.
2. Get insured
More than ever, members of the sandwich generation club need to plan for the future. Consider the option of long-term care insurance for you and your parents. Also look into the eventual possibility that you or your parents may require nursing home care. Long-term care insurance can help offset some of your asset-draining costs.
The important thing to note is the type of insurance and the sum insured when shopping for an insurance policy for yourself and your families. Your aging parents may not need life insurance coverage, but will definitely need medical insurance. Though the premium may be costly due to their age, it will protect you financially when he or she needs medical attention.
On the other end, preparing financial protection for your child helps safeguard your assets should disaster strike. Having adequate coverage also helps ensure that your child is financially independent and protected when you are no longer around. Some insurance policies offer financial coverage benefits and allow your child to cash out on their sum insured when the policy reaches maturity.
Last but not least, make sure you’ve got your own health covered. A short hospital stay can cost thousands of ringgit. If you don’t have medical insurance, you could be responsible for the entire bill, wiping out your hard-earned savings.
Some factors to consider when shopping for insurance include the cost of coverage, the duration in which you might need it, and the kind of benefits you will get. Insurance gives you the peace of mind and ensure financial continuity should the worst occur.
3. Know where you can get help
Many people are reluctant to get help for fear of being seen as weak or incompetent. Sometimes, getting help is necessary to help you function normally and provide care for your loved ones to the best of your abilities.
There are many agencies and organisations in the Klang Valley that can help provide information, services and support for the elderly and their caregivers. However, when browsing through your options, it is important to research the assisting living facilities and look into aspects such as cleanliness, credibility and reliability of care.
Meanwhile, nurseries and day-care centres allow parents with young children to go about their daily activities at work and at home. You may even choose to hire a caregiver from a reputable home-care agency to provide the much-needed respite care.
There is an abundance of resource and support groups that you can look up online for information on care services and facilities to help you make the best decision for your needs. The first step to getting help is to start asking for it.
4. Plan ahead for retirement
Retirement planning ranks poorly on the priority list for many Malaysians. A survey revealed that 43% of respondents were inadequately prepared, and that one in 10 were not prepared at all for retirement.
Statistics by the Employees Provident Fund (EPF) reveal that an estimated 50% of retirees use up all their EPF savings within five years of retirement.
The moral of the story is to stop putting off planning and start contributing towards your retirement. The simple rule of thumb is to ensure that you have 2/3 replacement income ratio of your last drawn salary in order to continue enjoying your current lifestyle post-retirement.
This is especially crucial for the sandwich generation member, who will need to keep in mind the increased costs if one or more of your children continue to live with you, and of ways to continue providing care and support for your parents should they lose the ability to care for themselves in the future. This will ensure you break the vicious cycle of sandwich generation, by relieving the burden off your children when you retire.
You can build a bigger retirement nest by boosting your fund reserves with the Private Retirement Scheme (PRS). The flexibility in the amount and time intervals of contribution, as well as tax relief and incentives that come with PRS investments, will contribute to your long-term financial goals.
5. Grow your income
You don’t necessarily have to work two jobs to grow your income. You can make more money on the side with passive income sources.
The basic idea of passive income is to elevate your income flow with little or no effort required, once the initial work has been established.
Passive income examples include rent from real estate, profit from businesses in which you have little day-to-day responsibilities, dividends from stocks and REITs, and interest from bonds and unit trust investments.
Your passive income strategy will depend on your age, financial capacity, and short and long-term goals. Having passive income streams is sometimes necessary to navigate in choppy financial waters and achieve economic stability.
6. Learn to say no
A common complaint of the sandwich generation is that their parents and children can go too far with their demands and expectations (overseas trips are a luxury and no, you don’t need an iPhone6). Turning down requests or gestures from your loved ones can take nerve, but are necessary at times.
Consider clarifying your state of finances, as well as time-constraints with your parents to help set their expectations right. If you have older children, you may want them to be responsible for specific expenses or share in the overall household budget if they are still living under your roof.
Sandwiched folks with siblings should consider rotating caregiving responsibilities and take turns to care for their parents.
When dealing with delicate matters, especially those that involve your parents, it is important to consider their dignity and independence when you help them make decisions.
Children on the other hand, need to know you are not a money tree and stop taking things for granted.
Being sandwiched isn’t for everyone. It regularly puts you in the doldrums and tests the boundaries of your sanity. But while at it, you might as well try and work out your balancing act, make time for your spouse, have fun and live life to the fullest.