A troubling phenomenon is now ubiquitous for many middle-aged adults: Welcome to the “Sandwich Generation.” No, not the good kind of sandwich, either. If you’re conjuring up a ham-and-pastrami-on-anything right now, you can stop. You just might go hungry.
Today’s “Sandwich Generation” refers to the many millions of middle-aged Americans that find themselves lending caregiving assistance to elder family members, while also providing continued assistance to younger family members still trying to get a foothold in the world. The “boomerang kids” (younger family members returning to the home nest) are often rubbing elbows with their parents longer than anticipated.
The situation makes for cramped quarters, noisier living spaces, “we need to talk” moments and more than a few sideways glances.
This is right in WiseTribe’s wheelhouse. You can be on either end of the spectrum (or both) and understand the predicament. At age 50-plus, you may have hoped to be free of certain responsibilities while hitting your stride in your career and personal development — not to mention your personal freedom.
The reality for many members of the WiseTribe generation is that current family demands may be at an all-time high. Social Security, the United States’ chief eldercare program, was developed when most adults rarely lived beyond their early sixties. As the nation’s average life expectancy continues to lengthen (currently about 76 for men and 81 for women), existing social policies and services will need to be reformed to help provide care to elders for longer periods of time.
Until such social change happens, more families are re-integrating their elders back into their primary care responsibilities. Sometimes, this means elders moving into the Sandwich Generation adults’ homes; other times it means transitioning to expensive assisted living, nursing care or memory care facilities.
The boomerang kids may have to share space with grandpa and/or grandma. Mom and dad have a fuller house and emptier wallets than ever before.
And then the economy happened
The worst financial mistake you can make in your 50s is to raid your retirement fund, or your home equity — if you have any. More on that in a minute. More adults in their 50s are finding themselves not only providing for their own lives, but the welfare of elders and/or young adult children. That can put a heavy strain on one’s finances.
It used to be that you could rely on the increasing equity in your home, as you paid down your mortgage over the years, to fund your retirement nest egg. The former belief that real estate was the smartest, most solid investment a family could make is now a myth exploded into flaming embers. With the real estate crash and Great Recession of a few years ago, many millions of American families had not only their current housing situations thrown into turmoil, but saw their retirement hopes and living mobility hopes obliterated.
Sandwich generation adults in 2014 are facing a serious crisis. At what other point in the last century of American history has a home investment not gained in equity over three-plus years? You would have to go back to the Great Depression to find another period in time where the much mythologized American dream of home ownership actually was an albatross upon a family’s future, rather than a wise investment. Real estate was the way to smart financial living, for even those of us that weren’t financial geniuses. It used to be that you could invest in a home and reap a financial reward at the end of the contract you dutifully fulfilled, which would carry you into retirement.
That dream, thanks to the crumbling economy born from the shysters, politicians and robber barons that made off with most of America’s wealth, has now been murdered.
Case in point
My wife and I bought our current home in 2005. We thought we would be here three to five years, and would then reevaluate where we wanted to be. About 18 months into our mortgage, the bottom fell out of the housing market. What had (up to that point) looked like a nice investment for our future, turned out to be a debilitating anchor that not only wrecked our financial plans, but also killed our chances to move to another market where our careers could be better served. We can’t move. Not unless we want to swallow a huge loss on our home, which, ever since 2007 has been worth less than what we owe on it. Pay $30,000 to $60,000-plus just for the privilege of being homeless? No thanks.
What did we do wrong? Did we do anything differently than our parents’ generation, or the generations before them? No. Did we buy too much house — overshot our means? No. We bought a modestly priced home in a modest neighborhood. We have always been able to afford our mortgage. We bought what we could afford at the time, just like most people do.
Many have it worse than we did. Some bought at the exact peak of the market. Some bought really expensive properties and suffered even more loss than we currently experience. We didn’t, although it was close. I kept a close eye on home values (having made a modest profit on my previous home due to market equity and sweat equity) and can attest that our home’s perceived market value continued to rise for the first 18 months of our mortgage. Then the crash came. At its lowest point, our home’s perceived market value cratered at about $100,000 less than what we paid for it. It has not fully recovered.
Which means we can’t move. We cannot afford a huge hit to our finances for the purposes of living life right now or in the near future. We must navigate careers only within commuting distance of our anchor, or successfully petition employers to pleasepleasepleasepleaseplease wise the F*&$ up and allow their workforce to work remotely.
We also cannot even think about retiring. There will be no home equity at the end of the rainbow. We must rely upon our 401Ks and other retirement annuities which we can no longer afford to fund at previous rates, for our retirement livelihoods. But those will be OK, right? It’s not like those funds took it in the shorts, too. Right?
Our story is not unique. Millions of Americans are in the same boat. We are the Trapped Generation.
Too tired to retire
The great retirement plan for millions of Americans is no more. What will happen when the Sandwich Generation finally sheds their familial responsibilities and aims to retire? For too many, the wealth previous generations enjoyed in retirement just won’t be there. Then what?
We’ll keep working, that’s what. How much strain can the trapped Sandwich Generation take? What kind of effect will that have on the economy and succeeding generations? Who will take care of this generation when they become elders? How long will Americans hang on to the belief that we should pay our mortgages when corporations shirk their financial responsibilities and win public bailouts?
Julian Rogers is a writer, editor, community manager and marketing communications consultant for high-achieving businesses. He is the senior communications consultant for Juju Eye Communications. Find out what he’s thinking about on his blog: mrturophile.com, or connect with him on LinkedIn, Facebook, Twitter and Google+.
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