Sandwiched: Balancing financial priorities

By Nancie Taylor

A growing number of Canadians are finding themselves raising and supporting their families while also juggling the needs of their parents. If this describes you, welcome to the sandwich generation.

In Ontario, 29 per cent of the provincial population (3.3 million) currently provide support and care to a chronically ill, disabled, or aging family member, friend or neighbour. Nationally, eight million Canadians are unpaid caregivers for family.

Why are so many feeling this generational squeeze? People are living longer. They are having children later. Meanwhile, many young adults are finding it too expensive to live on their own. Living longer also means paying for a for longer retirement.

Eventually a health event will happen that can have a long-term financial impact as well as emotional consequences. While we can’t control everything about our health we can control taking steps today to ensure a financial and ‘aging well’ plan is communicated and in place for when the time comes for us or a loved one.

Here are some strategies to take control of your sandwich finances.

Start talking early: If a financial or medical crisis forces you to act, you may not have the time or flexibility you need.  Talk about assets, investments, wills, estate plans and living arrangements as well as advance care, living wills and end-of-life plans.

Find out your parents’ long-term care preferences now, in case the day comes when they won’t be able to participate in the discussion or you are forced to choose care in crisis. Doing so can help you estimate costs and understand your options.

Start saving now: If you’re in the sandwich generation, it’s even more important to save as much as possible. So be sure to take advantage of any and all tax-advantaged saving vehicles such as a TFSA, RRSP, RESP or RDSP if you have a disabled child or parent.

If possible, avoid tapping into your retirement savings to support your kids or parents. If you aren’t already saving for your children’s post-secondary education, consider making sufficient contributions to an RESP to get all available government grants, so you’re not leaving ‘free money’ on the table.

Protect your loved ones: Remember, OHIP does not cover everything.  Make sure you and your parents have adequate health care insurance now and in the future.  Be prepared as the cost of out-of-pocket medical care not covered by the government is increasing.  Also be ready with a power of attorney for care and finances in place to manage parental care.

Finally, with the needs of multiple generations on your shoulders, protecting your family from the risk of your disability or death may be more important than ever. Disability and life insurance can help make sure that your loved ones are cared for in the event that you are unable to work.

Plan for the inevitable: Rather than managing in crisis, start to prepare now for life events that aging brings.  So take control by planning more diligently, saving more carefully, and keeping your retirement saving a top priority.

Nancie Taylor is a Senior Wealth Advisor, CFP at Meridian.