helping support elderly parent and your kids


A lot is being asked of middle-aged adults these days. Increasingly, people in their 20s and 30s are being supported financially by their parents while elderly parents are often getting money from their children. That’s why today’s middle-aged people with both kids and elderly parents are called the sandwich generation: They’re in the middle of that three-level set of relatives.

Should you support your elderly parents? If so, what’s the best way to handle this? And how will it affect being able to help your kids and yourself?

Helping your Kids

Today’s adult children are increasingly dependent on their parents to help pay for their expenses, including rent, student loans, health insurance and more, reports CBS News. A survey of 2,500 parents by Bankrate found that:

  • 17% said they sacrificed their own retirement savings by “a lot” to help their adult children
  • 34% said they had “somewhat” sacrificed their savings plans

Just over half said their retirement savings had suffered to some degree because of their financial support of their children — but that’s only half the equation.

Helping your Parents

A 2015 survey by TD Ameritrade found that 13% of adults were giving financial support to a parent, according to an article in the Washington Post by Liz Weston. Millennials (those born between 1981 and 1996) had the highest rate of providing financial help: 19%, compared with 13% of Gen Xers (1965 to 1980) and 8% of baby boomers (1946 to 1964).

Depending on the family and their wealth, providing that help may not be a problem or can be a source of stress and conflict. Even if the family budget can accommodate the financial help comfortably now, adult children may think about the fact this money won’t be saved for their own retirements because their parents didn’t budget adequately. That can create resentment.

Weston suggests taking these steps if you’re supporting a parent, or think you might in the future.

  • Talk to your partner: Come to an agreement about whether you will help and if so, by how much and under what circumstances. Will you do this on an ongoing basis or only if an emergency comes up? If a parent needs long-term care, can he or she move into your home? If not, can you help pay for private care?
  • Talk with your parents: Only just over half of those in the survey who said they were supporting their parents ever talked to them about it ahead of time. If you can learn about their financial situation now, you might be better prepared to help them in the future. You could also help your parents now by setting up a budget and applying for assistance programs in their area on their behalf.
  • Get siblings involved: If you have siblings, make sure they’re all aware of your parents’ financial situation and possible future needs. Can your siblings contribute? If so, how much? If they can’t contribute money, can they spend time doing things that could reduce your parents’ expenses or help them maintain their independence? Running errands, taking parents to healthcare providers, handling bill payment — that kind of help could keep your parents in their home longer or delay the need to hire people to help them with their daily needs.
  • Don’t forget yourself: You might have to delay retirement, forego buying a nicer home, or decide to help your parents financially — but not your kids. Whatever your goals, try to plan ahead accordingly. When doing financial planning for your retirement, it might be smart to assume you’ll be on your own financially, unable to rely on your kids to help you pay your bills.

There are many moving pieces when you plan for your retirement. Although you’re younger than your parents, that doesn’t mean you will outlive them. You could include your parents in your estate plans as beneficiaries in a will or a trust (which may not affect their eligibility for Medicaid or assistance programs), so you can help them financially even if you’re not around to do it in person.

Whether you’re thinking about balancing the needs of your multi-generational family or ready to think about your retirement, we can help. Contact our office to speak to one of our estate planning attorneys about how you may be able to help your children and parents — and self — through estate planning.

Related Posts