Broker Check

Planning for the Sandwich

November 14, 2022

We all dream of a desirable life. The goal is being able to spend time where we want, doing what we want, when we want, with those people we want to be with and with the knowledge we can afford to do it. 

Planning for this kind of life, whether prior to or after retirement, is no easy matter. It’s fraught with many risks and potential obstacles. Some of the more common risks associated with financial planning include:

  • Market risk – the risk that the value of your investments may shrink or underperform to meet your needs
  • Sequence of return risk – the risk you may be unlucky and retire just before a significant and possibly extended market downturn
  • Interest rate risk – the risk that changes in interest rates may adversely impact your interest-bearing investments or outstanding debt
  • Inflation risk – the risk that your accumulated investments may lose purchasing power over time
  • Longevity risk – the risk you may outlive your money
  • Income tax risk – the risk that income tax rates may increase in the future or vary from the rates you assumed

I refer to these types of risks as direct, objective risks. They describe hazards that may arise from genetic, economic, environmental and political considerations largely out of our control, but with a direct, measurable and somewhat anticipatable impact on our investments and cash-flow. 

There are, however, other risks that are perhaps more insidious and less obvious.   They may not often be planned for because they may not be as “measurable,” and they may be more unpleasant to think about. These types of vulnerabilities may include the financial drag resulting from:

  • A medical or long-term care need of someone in the immediate or even extended family
  • Losses from identity theft and fraud
  • Funding a divorce
  • Supporting “under-productive” adult children
  • Caring for debilitated parents
  • Raising grandchildren.

These situations may arise as a surprise. When they do arise, they may present a significant and unplanned high priority competitor for financial and emotional shelf-space in your life.

Pew Research found that about 29% of US adults have a child at home and 12% of these parents provide unpaid care for an adult as well.1 This kind of time and financial squeeze describes the Sandwich Generation Caregiver – juggling the challenges of caring for their children and aging parents at the same time.2 This statistic does not even include those “sandwich” caregivers where the children being supported are not living at home.

When my wife and I were assisting my son with his three young children at the same time as we were dealing with maintaining appropriate long-term care for my elderly mother-in-law, we entered the realm of what I called the Club Sandwich Generation due to the additional generational level (grandchildren) involved.3 

How can we plan to address this sandwich caregiver risk? There is some good news here. Some of the tried-and-true financial planning techniques incorporated in other areas of your planning can also help address this risk, such as:

  • Life Insurance - Life insurance coverage purchased on the life of a caregiver as part of a basic plan to protect the ability to achieve family goals can also provide the liquidity to help ease some of the sandwich caregiving financial obligations on surviving family members. Life insurance on the lives of the “senior generation” can help the surviving caregivers move on financially.
  • Long-Term Care Insurance – Long-term care insurance coverage purchased for the “senior generation” early enough in their lives can also play an important role in easing caregiving financial obligations.
  • Cash Reserves - Maintaining sufficient cash reserves on the part of both the “senior generation” and the caregiving generation can allow for some financial flexibility to react to surprise events.
  • Surrogate Decision-Making Planning – With increasing age comes increasing frailty and an increasing chance that members of the “senior generation” will need help in making healthcare and financial decisions. Documents such as healthcare proxies and powers of attorney can be useful in designating the agents to make these decisions.

Above are just a few examples. Planning in advance is key. It can allow you to face these kinds of situations decisions with the with more confidence. If you have not created your own financial plan, you may not be as well-positioned as you might like to respond to some of the more subtle threats to your lifestyle.  

Based on the foregoing, a plan addressing multi-generational issues is more than just an investment plan. How you invest to fund lifestyle, what you do to protect that lifestyle and what you do to protect the quality of life for those you may care for are all part of the plan. 

Caregiving for a senior may be challenging and stressful. It can involve managing their personal and medical care as well as, financial and legal issues. All of this in addition to the tasks and patience needed to raise and/or support children at the same time are what demand so much from the “sandwich generation.’

What do you do if you haven’t put in place any insurance, if you don’t know whether there’s sufficient cash reserves or if the mere contemplation of these kinds of complex situations are overwhelming to consider? The answer is simple: GET HELP. A good holistic comprehensive planner can help you organize your life and prepare you to respond to foreseeable risks.

We, at the Family Wealth Decisions Group routinely talk with our clients about their parents, children and grandchildren. One of the reasons for those discussions is to be able to help fashion an action plan or a decision tree in advance to address these kinds of potential issues.

Unfortunately, we’ve seen the cost of not planning in advance. Please contact us if you would like to arrange a complimentary one-hour consultation to discuss this kind of multigenerational planning. Remember, we are here to help.

  1. (
  3. A club sandwich as an extra piece of bread – another layer.


Roy Gilbert is a Registered Representative and supports Tyler Simmons, a Registered Representative of Lincoln Financial Advisors Corp. Securities and advisory services offered through Lincoln Financial Advisors Corp., a broker/dealer (Member SIPC) and registered investment advisor. Insurance offered through Lincoln affiliates and other fine companies. Family Wealth Decisions Group is a marketing name for Registered Representatives of Lincoln Financial Advisors, Corp. CRN-5198423-111722