Me and My Money

Sandwich Generation

Posted November 25, 2011
Originally Published November 7, 2011

Who feels like a panini? Just think about a gooey, cheesy filling compressed between a chewy ciabatta bun seared in a hot, heavy pan. Sounds pretty inviting doesn’t it?

Sorry, this column isn’t about the panini you eat, rather the one you are -- that is if you are a member of the sandwich generation with aging parents or other family members who need assistance and children, often into their mid to late twenties, still partially or completely dependent financially.

In 2002 Statistics Canada estimated that 2.6 million Canadians between the ages of 45 and 64 had children under 25 living with them and approximately 27% of them were also providing some kind of elder care. After the financial collapse and recession the trend has accelerated.

Many of my friends are being sandwiched, as am I. My youngest daughter, nearly 26, is deaf. She’s still at college and may require financial help for some time to come. Until recently, my parents also needed considerable care. My mother died in 2009 and, fortunately, my father is relatively healthy and able to live in a nice retirement home. But now and then, the needs of daughter and father collide with my own busy life and I feel pulled in a dozen directions.

Most of those sandwiched between two generations are baby boomers, the first of whom started collecting their old age pension in 2011. The advancing wave of this group is bringing with it a whole set of new financial challenges. “My daughter and son have student loans of $42,000 between the two of them. Despite their best efforts they’re semi-employed and living in an expensive city (Toronto),” Helen, 59 e-mailed recently. Helen is widowed and lives in a small northern Ontario town where jobs are limited. “I have enough to retire in a couple of years but not if I help them, especially if their situations don’t improve pretty fast. But I can’t see turning my back on them.”

The choices being forced on the sandwich generation often leave the caregivers feeling damned if they do or don’t. Should I stop RRSP contributions to help my family? Do I postpone my retirement? Will my employer let me go if I take time off to care for my parents? Should I withdraw from my savings? Do I kick out my kids so I can downsize?

Many of the difficulties facing sandwiched boomers are magnified for entrepreneurs. Even with great employees the buck stops with the boss and stepping away is rarely a satisfactory option.

Winnipeg-based bestselling tax author and president of the Knowledge Bureau, Evelyn Jacks juggled a successful business while being the primary caregiver of two ailing family members and also involved with the care of two others. All four died over an 18-month period. “Caring for the sick and the dying is difficult and exhausting and so sharing the journey with your support network is very important,” she says in retrospect.

“A strategic, consistent and all-inclusive communications plan within the family is very important. When everyone stays in the loop in an orderly way—we used email a lot to cover all the time zones—everyone can seamlessly step in as required. It also means everyone needs to work hard to stay healthy—physically and emotionally--in very stressful times.”

Being sandwiched between the needs of two and sometimes three generations isn’t a new phenomenon. My parents brought “the grannies”, as we called them, from England while I was young. One drank like a fish and gave away money to whomever asked and the other frequently wandered off only to be found settled on someone’s porch happily singing It’s a Long Way to Tipperary.

But the extended caregiving facing the boomers is unique because this generation is so large, our parents are living longer and our children carry a far higher student debt load than past generations. According to a 2010 Vanier Institute of the Family Study, university graduates have $18,000 in student loans, not including family debt or lines of credit.

To compound the problem young adults are also earning less relatively. Statistics Canada figures show that the wages of those 20 to 34, across all levels of education levels declined significantly in the 1980s and the trend has continued to present day, though at a lesser pace.

These financial and emotional stresses prompted Credit Canada, the country’s leading not-for-profit credit counseling charity, to choose the sandwich generation as the theme for its fifth Credit Education Week – part of November’s Financial Literacy Money, which kicks off on November 14th.

“Credit Canada has seen more and more people trying to support their children and aging parents who don’t have the income to support themselves while struggling to pay their own bills including their children’s education,“ notes executive director Laurie Campbell.

Credit Education Week Canada has published a very useful magazine, The Sandwich Generation, (available November 14th at www.cewc.ca). Among some of the do’s and don’ts:

1. Set up a power of attorney
2. Update wills and ensure healthcare directives are in place
3. Consolidate the debts and assets of the elderly to make management simpler
4. Don’t bleed your own savings, especially RRSPs, or increase your debt load (except in the direst circumstances) for the young or the old
5. Don’t allow unemployed kids to hang out at home doing nothing.
6. Don’t excuse siblings or other relatives from their responsibility

Of course, good advice isn’t always easy to follow when you’re the filling in the sandwich and getting squeezed. But one thing I do know, if you cripple yourself financially and emotionally you won’t be able to make sound decisions for yourself or those you are helping.

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