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Planning for Marriage: Financial Tips for Women

Planning for marriage should involve more than just picking out invitations and deciding whether you should serve chicken or fish at the reception. More importantly, you’ll want to take a look at how marriage will impact your financial situation.

And while there are a number of issues you’ll need to think about, careful planning can increase the likelihood that you’ll have financial success as you enter this new chapter in your life.

Consider a prenuptial agreement

If either you or your future spouse has or may inherit substantial assets, or if either of you has children from previous marriages, you may want to consider a prenuptial agreement.

A prenuptial agreement is a binding contract between future spouses that defines the rights, duties, and obligations of the parties during marriage and in the event of legal separation, annulment, divorce, or death.

A prenuptial agreement typically addresses the following areas:

  • Assets and liabilities–What assets will each of you bring into the marriage? What liabilities do each of you have (e.g., credit card/mortgage debt)?
  • Contributions of each partner–Will there be particular consideration given for special contributions that either of you make (e.g., one spouse limiting his or her career)?
  • Divorce–If you and your future spouse divorce, will there be alimony or a lump-sum payment? How will you divide assets purchased from joint funds?
  • Estate planning–Who gets what at the death of either spouse?

Discuss your financial history

Marriage is the union of two separate individuals … and their finances. While talking about money can be a stressful topic for many couples, you’ll want to sit down and discuss your financial history and your future spouse’s financial history before you merge your money.

Start out by taking stock of each of your respective financial situations. You should each make a list of your individual assets (e.g., investments, real estate) and any liabilities (e.g., student loans, credit card debt) you may have.

This is also the time to address items such as how much each of you earns and if either of you has additional sources of income (e.g., interest, dividends).

Agree on a system for budgeting/maintaining bank accounts

Right now, you are probably accustomed to managing your finances in a way that is comfortable for you and you alone. Once you are married, you and your spouse will have to agree on a system for budgeting your money and paying your bills together as a couple.

Either of you can agree to be in charge of managing the budget, or you can take turns keeping records and paying the bills.

If both of you are going to be involved in the budgeting process, make sure that you develop a record-keeping system that both of you understand and agree upon.

In addition, you’ll want to keep your records in a joint filing system so that both of you can easily locate important documents.

Once you agree on a budgeting system, you’ll be able to establish a budget. Begin by listing all of your income and expenses over a certain time period (for example, monthly).

Sources of income can include things such as salaries and wages, interest, and dividends. Expenses can be divided into two categories: fixed (e.g., housing, utilities, food) and discretionary (e.g., entertainment, vacations).

Be sure to include occasional expenses (e.g., car maintenance) as well. To help you and your future spouse stay on track with your budget:

  • Try to make budgeting part of your daily routine
  • Build occasional rewards into your budget (e.g., going to the movies)
  • Examine your budget regularly and adjust/make changes as needed

This might also be a good time to decide whether you and your future spouse will combine your bank accounts or keep them separate.

While maintaining a joint account does have its advantages (e.g., easier record keeping and lower maintenance fees), it is sometimes more difficult to keep track of the flow of money when two individuals have access to a single account.

If you do decide to combine your accounts, each spouse should be responsible for updating the checkbook ledger when he/she writes a check or withdraws funds.

If you decide to keep separate accounts, consider opening a joint checking account to pay for household expenses.

Map out your financial future together

An important part of financial planning as a couple is to map out your financial future together. Where do you see yourself next year? What about five years from now? Do you want to buy a home together?

If you decide to start a family, would one of you stay at home while the other focuses more on his or her career?

Together you should make a list of short-term financial goals (e.g., paying off wedding debt, saving for graduate school) and long-term financial goals (e.g., retirement).

Once you have decided on your financial goals, you can prioritize them by determining which ones are most important to each of you. After you’ve identified which goals are a priority, you can set your sights on working to achieve them together.

Resolve any outstanding credit/debt issues

Since having good credit is an important part of any sound financial plan, you’ll want to identify any potential credit/debt problems either you or your future spouse may have and try to resolve them now rather than later.

You should each order copies of your credit reports and review them together. You are entitled to a free copy of your credit report from each of the three major credit reporting agencies once every 12 months (go to www.annualcreditreport.com for more information).

For the most part, you are not responsible for your future spouse’s past credit problems, but they can prevent you from getting credit together as a couple after you are married.

Even if you’ve always had spotless credit, you may be turned down for credit cards or loans that you apply for together if your future spouse has a bad track record with creditors.

As a result, if you find that either one of you does have credit issues, you might want to consider keeping your credit separate until you or your future spouse’s credit record improves.

Consider integrating employee and retirement benefits

If you and your future spouse have separate health insurance coverage, you’ll want to do a cost/benefit analysis of each plan to see if you should continue to keep your health coverage separate.

If your future spouse’s health plan has a higher deductible and/or co-payment or fewer benefits than those offered by
your plan, he or she may want to join your health plan instead. You’ll also want to compare the premium for one family plan against the cost of two single plans.

In addition, if both you and your future spouse participate in an employer-sponsored retirement plan, you should be aware of each plan’s characteristics.

Plans may differ as to matching contributions, investment options, and loan provisions. Review each plan together carefully and determine which plan provides the better benefits.

If you can afford to, you should each participate to the maximum in your own plan.

Assess your insurance coverage needs

While you might not have felt the need for life and disability insurance when you were single, once you are married you may find that you and your future spouse are financially dependent on each other.

If you don’t have life or disability insurance, you will want to have policies in place in order to make sure that your future spouse’s financial needs will be taken care of if you should die prematurely or become disabled.

If you already have life and disability insurance, you should reevaluate the adequacy of your existing coverage and be sure to update any beneficiary designations as well.

You should also take a look at your auto insurance coverage. Check your policy limits and consider pooling your auto insurance policies with one company (your insurance company may give you a discount if you insure more than one car with them). As for renters/homeowners insurance, you’ll want to make sure your personal property and possessions are adequately covered.

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Counting on Your Husband’s Retirement Income? Three Things Women Should Know

Women face special challenges when planning for retirement. Women are more likely than men to work in part-time jobs that don’t qualify for a retirement plan. And women are more likely to interrupt their careers (or stay out of the workforce altogether) to raise children or take care of other family members.

As a result, women generally work fewer years and save less, leaving many to rely on their husbands’ savings and benefits to carry them both through retirement.1

But this reliance creates risk–risk of divorce, risk that retirement funds won’t be adequate to last two lifetimes (a risk that falls disproportionately on women, who outlive men on average by almost five years),2 and risk of bad retirement payout decisions.

Here are three things you should know if you’re relying on your husband’s savings to carry you through retirement.

Qualified joint and survivor annuities

If your husband is covered by a traditional pension plan at work, one of the most important retirement decisions the two of you may make is whether to receive his pension benefit as a “qualified joint and survivor annuity” (QJSA).

While the term sounds complicated, the concept is simple: should you elect a benefit that pays a higher amount while you’re both alive and ends when your husband dies (a single life annuity), or a benefit that pays a smaller amount during your joint lives but continues (in whole or in part) to you if your husband dies first (a QJSA)?

In order to fully understand your choices, it may help to first go over how a traditional pension plan works. Typically, you’re entitled to a “normal benefit,” payable for your lifetime and equal to a percent of your final pay, if you work for a certain number of years and retire at a certain date.

A plan might say that you’ll get 50% of your final pay for life if you work 30 years and retire at age 65. If you work fewer years, your benefit will be less. If you retire earlier than age 65, your benefit will also be less, because it’s paid for a longer period of time.

For example, assume Joe is covered by a pension plan at work, and his plan contains the exact formula described above. Joe retires at age 65. He’s worked 30 years, and his final pay was $100,000.

He’s entitled to a normal benefit of $50,000 per year, payable over his lifetime and ending at his death (a single life annuity).

But in order to protect spouses, federal law generally provides that if Joe is married, the plan can’t pay this benefit to Joe as a single life annuity unless his spouse, Mary, agrees.

Instead, the benefit must be paid over Joe and Mary’s joint lives, with at least 50% of that benefit continuing to Mary for her remaining lifetime if she survives Joe.

(That’s why it’s called a “joint and survivor annuity;” and it’s “qualified” because it meets the requirements of federal law — “QJSA” for short.)

Now, here’s where it gets a little complicated. Because the QJSA benefit is potentially paid for a longer period of time–over two lifetimes instead of one — Joe’s “normal benefit” will typically be reduced.

Actuaries determine the exact amount of the reduction based on your life expectancies, but let’s assume that Joe’s benefit, if paid as a QJSA with 50% continuing to Mary after Joe’s death, is reduced to $45,000.

This amount will be paid until Joe dies. And if Mary survives Joe, then $22,500 per year is paid to her until she dies. But if Mary dies first, the pension ends at Joe’s death, and nothing further is paid.

The plan will usually offer the option to have more than 50% continue to you after your spouse dies. For example, you may be able to elect a 75% or 100% QJSA. However, the larger the survivor annuity you select, the smaller the benefit you’ll receive during your joint lives.

So, for example, if 100% continues after Joe’s death, then the payment to Joe might now be reduced to $40,000 (but $40,000 will continue to be paid after Joe’s death to Mary if she survives him)

You can rest assured that the QJSA option will be at least as valuable as any other optional form of benefit available to you — this is required by federal law.

In some cases, it will be even more valuable than the other options, as employers often “subsidize” the QJSA. “Subsidizing” occurs when the plan doesn’t reduce the benefit payable during your joint lives (or reduces it less than actuarially allowed).

For example, a plan might provide that Joe’s $50,000 normal benefit won’t be reduced at all if he and Mary elect the 50% QJSA option, and that she’ll receive the full $25,000 following Joe’s death.

It’s important for you to know whether your spouse’s plan subsidizes the QJSA so that you can make an informed decision about which option to select.

Other factors to consider are the health of you and your spouse, who’s likely to live longer, and how much other income you expect to have available if you survive your spouse.

You’ll receive an explanation of the QJSA from the plan prior to your spouse’s retirement, which should include a discussion of the relative values of each available payment option.

Carefully read all materials the plan sends you. A QJSA may help assure that you don’t outlive your retirement income — don’t waive your rights unless you fully understand the consequences.

And don’t be afraid to seek qualified professional advice, as this could be one of the most important retirement decisions you’ll make.

Qualified domestic relations orders

While we all hope our marriages will last forever, unfortunately that’s not always the case. And since men generally have larger retirement plan balances,1 the issue of how these benefits will be handled in the event of a divorce is especially critical for women who may have little or no retirement savings of their own.

Under federal law, employer retirement plan benefits generally can’t be assigned to someone else. However, one important exception to this rule is for “qualified domestic relations orders,” commonly known as QDROs.

If you and your spouse divorce, you can seek a state court order awarding you all or part of your spouse’s retirement plan benefit. Your spouse’s plan is required to follow the terms of any order that meets the federal QDRO requirements.

For example, you could be awarded all or part of your spouse’s 401(k) plan benefit as of a certain date, or all or part of your spouse’s pension plan benefit.

There are several ways to divide benefits, so it’s very important to hire an attorney who has experience negotiating and drafting QDROs — especially for defined benefit plans where the QDRO may need to address such items as survivor benefits, benefits earned after the divorce, plan subsidies, COLAs, and other complex issues.

(For example, a QDRO may provide that you will be treated as the surviving spouse for QJSA purposes, even if your spouse subsequently remarries.) The key takeaway here is that these rules exist for your benefit. Be sure your divorce attorney is aware of them.

You can have your own IRA

While it’s obviously important for women to try to contribute towards their own retirement, if you’re a nonworking spouse, your options are limited. But there is one tool you should know about. The “spousal IRA” rules may let you fund an individual retirement account even if you aren’t working and have no earnings.

A spousal IRA is your own account, in your own name–one that could become an important source of retirement income with regular contributions over time.

How does it work? Normally, to contribute to an IRA, you must have compensation at least equal to your contribution.

But if you’re married, file a joint federal income tax return, and earn less than your spouse (or nothing at all), the amount you can contribute to your own IRA isn’t based on your individual income, it’s based instead on the combined compensation of you and your spouse.

For example, Mary (age 50) and Joe (age 45) are married and file a joint federal income tax return for 2017. Joe earned $100,000 in 2017 and Mary, at home taking care of ill parents, earned nothing for the year. Joe contributes $5,500 to his IRA for 2017.

Even though Mary has no compensation, she can contribute up to $6,500 to an IRA for 2017 (that includes a $1,000 “catch-up” contribution), because Joe and Mary’s combined compensation is at least equal to their total contributions ($12,000).

The spousal IRA rules only determine how much you can contribute to your IRA; it doesn’t matter where the money you use to fund your IRA actually comes from — you’re not required to track the source of your contributions. And you don’t need your spouse’s consent to establish or fund your spousal IRA.

(The spousal IRA rules don’t change any of the other rules that generally apply to IRAs. You can contribute to a traditional IRA, a Roth IRA, or both. But you can’t make regular contributions to a traditional IRA after you turn 70½.

And your ability to make annual contributions to a Roth IRA may be limited depending on the amount of your combined income.)

 

Important Disclosure

Women are more likely than men to work in part-time jobs that don’t qualify for a retirement plan. And women are more likely to interrupt their careers (or stay out of the workforce altogether) to raise children or take care of other family members. As a result, women generally work fewer years and save less, leaving many to rely on their husbands’ savings and benefits to carry them both through retirement.1
Sources
1U.S. Department of Labor, “Women and Retirement Savings,” www.dol.gov (accessed November 2016)
2NCHS Data Brief, Number 229, December 2015

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Teaching Your College-Age Child about Money

When your child first started school, you doled out the change for milk and a snack on a daily basis. But now that your kindergartner has grown up, it’s time for you to make sure that your child has enough financial knowledge to manage money at college.

Lesson 1: Budgeting 101

Perhaps your child already understands the basics of budgeting from having to handle an allowance or wages from a part-time job during high school.

But now that your child is in college, he or she may need to draft a “real world” budget, especially if he or she lives off-campus and is responsible for paying for rent and utilities. Here are some ways you can help your child plan and stick to a realistic budget:

  • Help your child figure out what income there will be (money from home, financial aid, a part-time job) and when it will be coming in (at the beginning of each semester, once a month, or every week).
  • Make sure your child understands the difference between needs and wants. For instance, when considering expenses, point out that buying groceries is a need and eating out is a want. Your child should understand how important it is to cover the needs first.
  • Determine together how you and your child will split responsibility for expenses. For instance, you may decide that you’ll pay for your child’s trips home, but that your child will need to pay for art supplies or other miscellaneous expenses.
  • Warn your child not to spend too much too soon, particularly when money that has to last all semester arrives at the beginning of a term. Too many evenings out in September eating surf and turf could lead to a December of too many evenings in eating cold cereal.
  • Acknowledge that college isn’t all about studying, but explain that splurging this week will mean scrimping next week. While you should include entertainment expenses in the budget, encourage your child to stick closely to the limit you agree upon.
  • Show your child how to track expenses by saving receipts and keeping an expense log. Knowing where the money is going will help your child stay on track. Reallocation of resources may sometimes be necessary, but help your child understand that spending more in one area means spending less in another.
  • Encourage your child to plan ahead for big expenses (the annual auto insurance bill or the trip over spring break) by instead setting aside money for them on a regular basis.
  • Caution your child to monitor spending patterns to avoid excessive spending, and ask him or her to come to you for advice at the first sign of financial trouble.

You should also help your child understand that a budget should remain flexible; as financial goals change, a budget must change to accommodate them. Still, your child’s ultimate goal is to make sure that what goes out is always less than what comes in.

Lesson 2: Opening a bank account

For the sake of convenience, your child may want to open a checking account near the college; doing so may also reduce transaction fees (e.g. automated teller machine (ATM) fees). Ideally, a checking account should require no minimum balance and allow unlimited free checking; short of that, look for an account with these features:

  • A simple fee structure
  • ATM or debit card access to the account
  • Online or telephone access to account information
  • Overdraft protection

To avoid bouncing checks, it’s essential to keep accurate records, especially of ATM or debit card usage. Show your child how to balance a checkbook on a regular (monthly) basis. Most checking account statements provide instructions on how to do this.

Encourage your child to open a savings account too, especially if he or she has a part-time job during the school year or summer. Your child should save any income that doesn’t have to be put towards college expenses. After all, there is life after college, and while it may seem inconceivable to a college freshman, he or she may one day want to buy a new car or a home.

Lesson 3: Getting credit

If your child is age 21 or older, he or she may be able to independently obtain a credit card. But if your child is younger, the credit card company will require you, or another adult, to cosign the credit card application, unless your child can prove that he or she has the financial resources to repay the credit card debt.

A credit card can provide security in a financial emergency and, if used properly, can help your child build a good credit history.But the temptation to use a credit card can be seductive, and it’s not uncommon for students to find themselves over their heads in debt before they’ve declared their majors.

Unfortunately, a poor credit history can make it difficult for your child to rent an apartment, get a car loan, or even find a job for years after earning a degree. And if you’ve cosigned your child’s credit card application, you’ll be on the hook for your child’s unpaid credit card debt, and your own credit history could suffer.

Here are some tips to help your child learn to use credit responsibly:

  • Advise your child to get a credit card with a low credit limit to keep credit card balances down.
  • Explain to your child that a credit card isn’t an income supplement; what gets charged is what’s owed (and then some, given the high interest rates). If your child continually has trouble meeting expenses, he or she should review and revise the budget instead of pulling out the plastic.
  • Teach your child to review each credit card bill and make the payment by the due date. Otherwise, late fees may be charged, the interest rate may go up if the account falls 60 days past due, and your child’s credit history (or yours, if you’ve cosigned) may be damaged.
  • If your child can’t pay the bill in full each month, encourage him or her to pay as much as possible. An undergraduate student making only the minimum payments due each month on a credit card could finish a post-doctorate program before paying off the balance.
  • Make sure your child notifies the card issuer of any address changes so that he or she will continue to receive statements.
  • Tell your child that when it comes to creditors, students don’t get summers off! Your child will need to continue to make payments every month, and if there’s a credit card balance carried over from the school year, your child may want to use summer earnings to pay it off in order to start the next school year with a clean slate.

Finally, remind your child that life after college often involves student loan payments and maybe even car or mortgage payments. The less debt your child graduates with, the better off he or she will be. When it comes to the plastic variety, extra credit is the last thing a college student wants to accumulate!

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Women: Moving Forward Financially after the Loss of a Spouse

The loss of a spouse can be a devastating, life-changing event. Due to longer life expectancies, women are more likely to face this situation. According to the U.S. Census Bureau’s 2015 Current Population Survey, approximately 34% of women age 65 and older are widows compared to approximately 12% of men.

Becoming a widow at any age can be one of the most difficult challenges a woman must face. Not only is there the emotional loss of a spouse, but also the task of handling everything–including all the finances–without the help of a spouse.

Even if you’ve always handled your family’s finances, the number of financial and legal matters that have to be settled in the weeks and months following your loved one’s death can be overwhelming.

Sadly, for many women, becoming a widow is a first step toward economic hardship. That’s why it’s critical for you to organize your finances after your spouse’s death and take ongoing steps to secure your financial future and that of your family.

First, take a deep breath

Before you start handling the financial end of things, though, make sure to consider your own needs. The period following the death of a spouse can be a blur of emotions–shock, sadness, despair, anger, denial. It’s important to allow yourself the freedom to feel however you want to feel. You don’t owe it to anyone to feel or act in a certain way.

Facing your loss can ultimately help you as you work to adapt to the new conditions of your life, so that in time you can create something new. This period of adjustment, which can last for several years, is often a time of profound self-discovery for women, who may find themselves examining issues of identity, life meaning, and aging.

During this time, it’s important to surround yourself with people you trust–family, friends, support groups, professionals–who can offer support and advice that’s in your best interest.

The short term: steps to take

There are several financial tasks that must be done in the weeks and months after a spouse’s death. If some matters are too overwhelming to tackle alone, don’t hesitate to ask family or friends for help.

Locate important documents and financial records.

In order to settle your spouse’s estate, you’ll need to locate a number of important documents. These include your spouse’s will and other estate planning documents (e.g., trust), insurance policies, bank and brokerage statements, stock and bond certificates, deeds, Social Security number, birth and marriage certificates, and certified copies of the death certificate.

Set up a communications tracking and filing system.

To help keep track of all the details, set up a system to record incoming and outgoing calls and mail. For phone calls, keep a notebook handy where you can write down the caller’s name, date, and subject of the call. For mail, keep track of what you receive and whether a response is required by a certain date.

Make a list of the names and phone numbers of the people and organizations you’re dealing with and post it in a central location. Finally, create a filing system for important documents and correspondence with separate folders for different topics–i.e., insurance, government benefits, tax information, bank records, estate records, and so on.

Seek professional advice to settle the estate and file tax returns.

Getting expert help from an attorney, accountant, and/or financial and tax professional can be invaluable during this stressful time. Consider bringing a family member or friend with you to meetings so you will have an extra pair of eyes and ears to process information.

An attorney can help you review your spouse’s will and other estate planning documents and start estate settlement procedures. If you are named executor in the will (or if you are appointed as the personal representative), you will be responsible for carrying out the terms of the will and settling the estate

Settling the estate means following certain legal and administrative procedures to make sure that all debts of the estate are paid and that all assets are distributed to the rightful persons. An attorney can tell you what procedures to follow. A tax professional can help you file certain federal and state tax returns that may be due.

A financial professional can help you by conducting a comprehensive review of your financial situation and identifying any retirement and survivor’s benefits that may be available to you.

 

Apply for benefits. You’ll need to contact several institutions for information on how you can file for benefits.

  • Life insurance–Life insurance benefits are not automatic; you have to file a claim for them. This should be one of the first things you do. Ask your insurance agent to begin filing a claim (if you don’t have an agent, contact the company directly). Most claims take only a few days to process.
  • Social Security Administration (SSA)–Contact the SSA to see if you and/or your dependent children are eligible to file a claim for retirement, survivor, or death benefits.
  • Employers–Contact your spouse’s most recent and past employers to find out if you are eligible for any company benefits. If your spouse was a federal, state, or local employee or in the military, you may be eligible for government-sponsored survivor’s benefits.

Update account names.

You may need to contact financial institutions to change account names and/or update contact information.

Evaluate short-term expenses.

You may have immediate expenses to take care of, such as funeral costs or outstanding debts your spouse may have incurred. If you’re waiting for insurance proceeds or estate settlement money, you can use credit cards for certain expenses or you can try to negotiate with creditors to allow you to postpone payment for 30 days or more, if necessary.

Make sure you have one or more credit cards in your name, and when you can, order a free copy of your credit report and review it for accuracy.

Avoid hasty decisions.

For discretionary financial decisions, go at your own pace, not someone else’s. For example, don’t commit to move from your current home until you can make a decision based on reason instead of emotion.

Don’t spend money impulsively. Don’t cave in to pressure to sell or give away your spouse’s possessions. Find out where you stand financially before you make any large purchases, sell property, or loan money to others.

Moving ahead: the big picture

After the initial legal and financial matters related to your spouse’s death are taken care of, you’ll enter a transition phase when you’ll be adjusting to your new financial circumstances. As you navigate this terrain, you might find it helpful to work with a financial professional who can help you by:

  • Suggesting ways to invest any life insurance proceeds or estate settlement money you receive
  • Calculating your net worth by identifying your assets and liabilities, giving you an understanding of how you’ll meet your short- and long-term spending needs
  • Establishing a budget by looking at your monthly income and routine living expenses, and making adjustments as needed
  • Helping you update beneficiary designations on your life insurance, retirement plan, IRA, employee benefits, annuity, and so on
  • Reviewing your investment portfolio at least annually
  • Updating your estate planning documents (e.g., will, trust, health-care directives, power of attorney) to reflect your circumstances and your wishes for disposition of the marital estate (e.g., gifts to children, grandchildren, charities)
  • Updating your insurance coverage to reflect your new circumstances

Generally speaking, women may have a different set of expectations and requirements from their financial professional than men. As you work with a financial professional, make sure he or she is responsive to what you say you need, not what your advisor thinks you want. Don’t be afraid to ask questions, and make sure you understand all your options before making important decisions.

We understand the unique needs and challenges women face. Click here to learn more information from our affiliate company PLJ Advisors

 

As you move forward with your life, remember that at times it may be two steps forward and one step back. Take comfort in the fact that you are doing the best you can to make the best decisions–financial and otherwise–for yourself and your family.

 

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Women: Living in the Sandwich Generation

At a time when your career is reaching a peak and you are looking ahead to your own retirement, you may find yourself in the position of having to help your children with college expenses or the financial challenges of young adulthood while at the same time looking after the needs of your aging parents.

Squeezed in the middle, you’re in the “sandwich generation”–a group loosely defined as people in their 40s to 60s who are “sandwiched” between caring for children and aging parents.

The fact is, women are the ones who most often step into the caregiving role.* As more women have children later in life and more parents live longer lives, the ranks of the sandwich generation are likely to grow in the years ahead.

If you find yourself sandwiched between caregiving demands, here are some strategies to navigate this life phase.

Setting priorities

The day-to-day demands of caring for both an aging parent and children can put a tremendous strain–both emotional and financial–on the primary caregiver.

This is especially true when adult siblings or family members don’t agree on the best course of action for elder care, don’t pitch in to do their share, or don’t contribute enough financially to the cost of that care.

The first thing to do is get yourself in the proper mindset. This life phase could last one or two years, or it could last many more. In any case, try to treat this stage as a marathon and pace yourself; you don’t want to start sprinting right out of the gate and burn out too soon.

Encourage open communication with your family to figure out ways to share the financial, emotional, and time burdens. Hold regular meetings to discuss issues, set priorities, and delegate tasks.

Women are often conditioned to believe they have to “do it all,” but there is no reason why adult siblings (if you have any) can’t share at least some of the workload.

It’s important for caregivers to get their own financial house in order. Ironically, at the very time you need to do this, the demands of caregiving may cause you to lose income because you have to step back at work–through reduced hours, unpaid time off, or turning down a promotion. Here are some tips to get your finances on track:

  • Establish a budget and stick to it
  • Keep your debt under control. Consumer debt (i.e., car payments, credit cards) should account for no more than 20% of your take-home pay.
  • Invest in your own future by putting as much as you can into your retirement plan, and avoid raiding it to pay for your parent’s care or your child’s college education.
  • Don’t quit your job before exploring other arrangements. If you need more time at home than vacation or personal days can provide, ask your employer if you can telecommute, flex your hours, reduce your hours temporarily, or take unpaid leave.Another option is to enroll your parent in an adult day-care program or hire a home health aide to fill the gaps. Some employers offer elder-care resource locators or other caregiving support as an employee benefit, so make sure to check.Permanently leaving your job should be a last resort–time out of the workforce will reduce not only your earnings but possibly your Social Security benefit at retirement as well.

Caring for your parents

Talk to your parents about their financial resources. Do they have retirement income? Long-term care insurance? Do they own their home? Learn the whereabouts of all their documents and accounts, as well as the financial professionals and friends they rely on for advice and support.

Much depends on whether your parent is living with you or out of town. If your parent lives a distance away, you’ll have to monitor his or her welfare from afar–a challenging task.

Though caregiving can be a major stress on anyone, distance can magnify it–daily phone calls or video chats might not be enough, and traveling to your parent’s home can be expensive and difficult to manage with your work and family responsibilities.

If your parent’s needs are great enough, you may want to consider hiring a geriatric care manager, who can help oversee your parent’s care and direct you to the right community resources, and/or a home health aide, who can check in on your parent during the week.

Here are some things you should do:

  • Take inventory of your parent’s assets and consolidate his or her financial accounts.
  • Get a current list of the medicines your parent takes and the doctors he or she sees.
  • Have your parent establish a durable power of attorney and health-care directive, which gives you legal authority to handle financial and health-care decisions if your parent becomes incapacitated. And make sure your parent has a will.
  • Consider consulting a tax professional to see if you might be entitled to potential tax benefits as a result of your caregiving; for example, you might be able to claim your parent as a dependent.
  • If your parent’s needs are great enough, you might need to go a step further and explore assisted-living options or nursing homes.

Eventually, you might decide that your parent needs to move in with you.

In that case, here are some suggestions to make that transition:

  • Talk with your parent in advance about both of your expectations and concerns.
  • If possible, set up a separate room and phone for your parent for some space and privacy.
  • Research local programs to see what resources are offered for seniors; for example, the senior center may offer social gatherings or adult day care that can give you a much needed break.
  • Ask and expect adult siblings to help out. Siblings who may live far away and can’t help out physically on a regular basis, for example, can make a financial contribution that can help you hire assistance. They can also research assisted-living or nursing home options. Don’t try to do everything yourself.
  • Keep the lines of communication open, which can go a long way to the smooth running of your multigenerational family.

Meeting the needs of your children

Your children may be feeling the effect of your situation more than you think, especially if they are teenagers.

At a time when they still need your patience and attention, you may be preoccupied with your parent’s care, meeting your work deadlines, and juggling your financial obligations.

Here are some things to keep in mind as you try to balance your family’s needs:

  • Explain what changes may come about as you begin caring for your parent. Talk honestly about the pros and cons of having a grandparent in the house, and be sympathetic and supportive of your children (and your spouse) as they try to adjust. Ask them to take responsibility for certain chores, but don’t expect them to be the main caregivers.
  • Discuss college plans. Encourage realistic expectations about the college they may be able to attend. Your kids may have to settle for less than they wanted, or at least get a job to help meet costs.
  • Teach your kids how to spend wisely and set financial priorities
  • Try to build in some special time with your children doing an activity they enjoy.
  • If you have “boomerang children” who’ve returned home, make sure to share your expectations with them, too. Expect help with chores (above and beyond their own laundry and meal prep), occasional simple caregiving, and a financial contribution to monthly household expenses.

Considering your needs

This stage of your life could last many years, or just a few. Try to pace yourself so you can make it for the long haul.

As much as you can, try to get adequate sleep, eat nutritiously, and exercise–all things that will increase your ability to cope. Don’t feel guilty about taking time for yourself when you need it, whether it’s a couple of hours holed up with a book or out to the movies, or a longer weekend getaway.

The day-to-day demands of caring for an aging parent and children can put a tremendous strain–both emotional and financial–on the primary caregiver. Be sure to set priorities and encourage open communication with your entire family to figure out ways to share the burdens.

According to the Alzheimer’s Association report, 2016 Alzheimer’s Disease Facts and Figures, approximately two-thirds of caregivers are women.

When you put your own needs first occasionally and look after yourself, you’ll be in a better position to care for those around you.

*Alzheimer’s Association report, 2016 Alzheimer’s Disease Facts and Figures

 

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