The Sandwich Generation: How to support post-college kids and aging parents

Consider this scenario: your teenage son graduates high school and heads off to college. He studies hard and finishes with a bachelor's degree in four years flat. He accumulates $40,000 in student loan debt, struggles to find a well-paying job and decides to move back home while looking for work. He needs help with student loan payments.

At the same time, your 80-year-old mother is struggling with medical bills and a mortgage. Before long she may require long-term care. You're on the cusp of retirement, but now you're wondering if working another five years makes sense.

Welcome to the "Sandwich Generation." Many baby boomers — Americans born in the two decades following World War II — are facing similar financial pressures. If this state of affairs sounds familiar, here are three suggestions for coping:

• Set priorities. Focus on your own financial affairs first. If you're struggling to make ends meet, it's harder to be generous. Also, your kids have a lifetime of earning potential ahead of them. As you approach age 60 and beyond, options tend to be more limited. With that in mind, it's often prudent to fully fund 401(k) and individual retirement accounts before helping kids with college costs and student loans. Pay down personal debt, especially high-interest loans and credit cards. Hone your budget with retirement in mind.

• Enlist the help of relatives. If possible, talk to siblings and other family members about the needs of aging parents. Relatives may be willing to help with caregiving or chip in to cover a portion of long-term care premiums, health care costs or mortgage payments. Elderly parents may be reluctant to divulge their financial affairs — including the availability of savings accounts, pensions and health insurance — but it's a discussion that needs to happen. Set up a planning meeting to explore options.

• Do your homework. Did your parent serve in the military? Under the Veterans Administration Aid and Attendance program, qualifying veterans and their spouses may be eligible for a VA pension of more than $2,800 per month to help cover the costs of elder care. Also, costs vary widely among assisted care facilities. When relocating an aging parent, consider the possibility of higher travel costs and the need to find knowledgeable health care professionals.

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