3 Self-Protection Tips for Sandwich Generation Members Feeling Squeezed

NEW YORK (TheStreet) -- The so-called "sandwich generation" has a lot on its plate these days, and it's figuring out how to handle the financial side of the equation that's most likely to be causing indigestion.

The term is used to describe middle-aged Americans who are supporting both children and parents financially -- a trend affecting more and more people as the giant baby boomer generation settles into old age.

"Nearly half (47%) of adults in their 40s and 50s have a parent age 65 or older and are either raising a young child or financially supporting a grown child (age 18 or older)," says a Pew Foundation study last year on the sandwich demographic. "And about one-in-seven middle-aged adults (15%) is providing financial support to both an aging parent and a child."

A year earlier, those figures were only 45% and 12%, respectively.

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It's critical that sandwich generation members not lose sight of their own financial goals even as they support their families.

"Many Americans find themselves having to keep multiple generations afloat, often at the expense of their own long-term security," says Eleanor Blayney, a consumer advocate for the CFP Board, a Washington, D.C.-based professional standards board for the financial planning industry. "The question for many middle-aged Americans becomes: How can I say 'yes' to my own financial needs and goals when it is impossible to say 'no' to needy family members?"  

Blayney's advice:

Define expectations and set boundaries. "If a young adult can't find a job and turns to the Bank of Mom and Dad, or checks into the Mom and Dad Hotel, it's important to define some terms," she says. "Similarly, the type and amount of care for elderly adults should be clearly articulated and put in writing, especially for other siblings or family members." She advises that caregivers focus immediately on having documents on hand that handle advanced and end-of-life care, as well as designating power-of-attorney for medical care and financial matters. 

Also see: Parents Don't Want to Talk Money With Their Adult Children

Do not compromise your capacity to earn a living. Taking care of kids and parents can be an exhausting and seemingly never-ending chore. But quitting your job, even for a year or two, is just not an option, Blayney says. "Avoid this if at all possible, as retirement and Social Security benefits will be permanently reduced  and re-entry into the workforce at a comparable level can be extremely difficult."

Learn what help is available from the government, community and other resources. It's worth a call to your local government Medicaid office to see if Uncle Sam or your state can help with an offer of reimbursement for caretakers under the state and federal government's Cash & Counseling program. 

Of course, the CFP Board strongly advises that you consult with a financial professional if you're stuck in a sandwich situation. 

"It's one thing to be sandwiched between the needs of generations one up and one down -- it's quite another to completely lose yourself and your own financial goals," Blayney says. "Reaching out to the people and organizations that can help you and taking some financially wise steps can transform the job of supporting family from a burden to an obligation of love and pride."

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