The Sandwich Generation

First, the baby boomers were taking care of the Greatest Generation. Now, it’s the Gen X, and even millennials, who are sandwiched between caring for their parents and launching their children into adulthood. Here are reasons why these people feel financially squeezed:

The Cost. According to AARP, caregivers spend an average of $7,240 out-of-pocket yearly on routine expenses for a loved one.

More Kids Boomerang than People Think. Saving.com found that 45% of parents financially support an adult child at an average cost of $1,440 per month.

Medicare Doesn’t Cover Everything. Original Medicare hospital insurance (Part A) and medical insurance (Part B) don’t cover all your parents’ or other loved ones’ medical needs. You or your elder will need to pay out-of-pocket or buy supplemental medical insurance to help cover out-of-pocket healthcare costs and any care services and routine dental and vision care.

You May Have to Postpone Your Retirement. Too often, sandwiched people sacrifice their retirement plan contributions to help others, particularly their parents. You may reach retirement age only to find you need to keep working longer than planned to meet your support obligations and have the comfortable retirement you want.

You Might Qualify for a Tax Break. If specific IRS criteria are met, your parent or child may qualify as your dependent, which can help reduce your income tax. Ask your tax professional for details.

If you find yourself in the sandwich generation or approaching it, talk with your financial professional about handling your specific needs.