FA-IQ reached out to advisors to ask: How do you guide the so-called 'sandwich generation' in caring for the older and younger generations in their families while keeping their own financial goals on track?

Faron Daugs, wealth advisor, founder and chief executive officer of Harrison Wallace Financial Group. Libertyville, Illinois-based Daugs has been in the industry for 30 years and has $150 million in client assets.

“The sandwich generation is being squeezed like no other generation before it. With increased housing costs, rising inflation, skyrocketing healthcare, childcare costs and helping elderly parents, this generation — primarily those in their 40s and 50s — may feel they have little leftover for retirement savings. The best way for this generation to stay on course is to overall understand the impact of taking money away from savings toward their financial goals.

For multi-generational caregivers, there’s increased pressure to support both their children and parents. As financial advisors, we need to encourage clients to pause and gently remind them to take care of themselves first. We should have regular meetings with clients to benchmark goals and give them a clear understanding of their long-term financial health given their other demands. We can position this as a way to break the sandwich generation cycle. Better planning now will afford them more financial flexibility in the future.

Faron Daugs
Beyond this, we need frequent communication with clients and their families — especially with aging parents. Many times, family members don’t have a full picture of their loved ones’ financial affairs or even health problems. And if an issue arises, then they are scrambling to pull resources together. Start having these conversations early so both clients and families can better understand what asset base is available to them and how it correlates to being able to use funds for their needs.

This is a difficult conversation for many people to have. Older generations tend to be quite private about their finances, especially when it comes to their own children. However, as financial advisors, we can encourage them to participate in generational meetings to have transparent conversations and understand what would happen financially to them if a loved one became sick.

It’s a good idea to start by asking specific questions such as: Do they have long term care insurance? Do they still have a mortgage? Are they planning to downsize or move?

At the end of the day, it’s about giving both parties a solid financial plan and sense of comfort.

Conversely, it’s important to start educating the younger generation on the importance of saving early. Though it might be easier said than done, I recommend clients have a dialogue with their young adult children on the best ways to save and share advice on how to maximize benefits with their job, set up a 401(k), and emphasize saving early. It’s even better if the younger family member comes in for a meeting to discuss the importance of ‘having a plan.’

Whether it’s paying for college tuition or long-term care, each generation has their own financial needs. By collaborating on a plan as family and with the support of a financial advisor, individuals can achieve not only a new perspective and balance but a roadmap for financial goals.”

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