Wealth Planning
Are you a member of the sandwich generation?
What happens when many couples are having children in their 30s or even 40s, and their parents are living longer? You have the sandwich generation – Canadians financially supporting their children while caring for their parents.
Supporting children
When the term sandwich generation was first coined, the children in mind were young. But today, the sandwich generation’s children include young adults. According to Statistics Canada, 35% of young adults aged 20 to 34 live with one or both parents, many requiring financial support.1
Also, parents may help children who have moved out, either to meet their cost of living or contribute toward a down payment on their first home.
Caring for parents
Helping one or both parents can be through financial support or providing care. Financial support may include expenses related to home modifications, private home care or an assisted living facility. Having the money talk with parents isn’t always easy, but you’ll want to know whether their income and savings will cover these expenses, so you can plan accordingly.
Typically, providing care involves helping out with one or more of household chores, meal preparation, personal care and coordinating care. Many sandwich generation caregivers reduce their work hours or take time off to care for a parent. A Canadian survey shows that decreased income from helping parents results in 63% of caregivers reporting financial hardship.2
Making it work
Helping your children and parents can be emotionally stressful and exhausting, so it’s important to take care of yourself too. It’s also important to have a wealth plan in place, to help avoid being one of the sandwich generation members who suffer financial hardship. You’ll want to estimate the costs of supporting your children and parents, then develop a strategy to manage any impact your support may have on your wealth plan and retirement savings. We’re always here to assist you in creating a plan that meets both your immediate and future needs.
1 Statistics Canada, Census of Population, 2021
2 Canadian Centre for Caregiving Excellence, National Caregiving Survey, 2023