Why the Sandwich Generation Needs to Talk Finances
In this episode of The Bottom Line, Tim Schuster from EisnerAmper’s Private Business Services Group talks about the challenges, conversation topics and planning opportunities for members of the sandwich generation—those individuals who are responsible for raising their children as well as caring for aging parents.
Dave Plaskow: Hello and welcome to The Bottom Line. This podcast examines the everyday business and finance issues faced by closely held and private businesses. We hope to provide you with news you can use in what we like to think of as a jargon-free zone. I'm your host, Dave Plaskow and with us is Tim Schuster, a manager in EisnerAmper Private Business Services Group. Today we'll discuss with Tim the types of conversations members of the Sandwich Generation should have in order to be more fiscally prepared. Tim, Hello.
Tim Schuster: Hey Dave. It's great to see you.
DP: Tim, explain to our audience what the Sandwich Generation is.
TS: Typically, it's people in their late 30s to early 60s who are responsible for bringing up their own growing children as well as caring for their aging parents.
DP: And that includes myself. How large is this group?
TS: It's massive. According to a Pier Research Center, one of every eight Americans aged 40 to 60 is both raising a child and caring for a parent. As Millennials and their parents age, this number is sure to skyrocket.
DP: As I can attest, as I mentioned earlier, this can be quite a large responsibility. So while there's no standard playbook for something like this, there are some things that people can do to prepare and be proactive. Why don't you tell us about that?
TS: Absolutely. It starts with honest, open conversations with parents about the issues and information, along with what their wishes are. It would be ideal to marry the two thoughts together to make sure all living arrangements and family issues are addressed. You do not want to see a family coming apart at the seams because there's a lack of communication. I would also advise calling family meetings to discuss all options that are on the table. The AARP has great information to help initiate discussions with family members.
DP: What are some of the topics that they should discuss?
TS: While certainly not exhaustive, they should talk about things like a retirement income stream and expenses, living situation via a nursing home or live-in care, health care needs and insurance coverage. It could be long-term coverage, business ownership succession, college funding for children, even where important documents are located. I can't believe how many people don't know this information. It's not that it's just the older generation doesn't tell them. That actually just happened recently with a client of mine. They don't know where the documents are and the father, the patriarch, is in his 80s. We want to make sure that you know were important documents are located. Lastly, an estate plan, which should include a will and wishes related to a funeral and final resting place.
DP: That’s a pretty comprehensive list. When should these conversations begin?
TS: The sooner the better. Why wait until a parent is incapacitated either physically or mentally. Then the conversation becomes that much more difficult.
DP: As an expert in taxation and family businesses, what do you think are some of the, shall we say, less-obvious financial issues that Sandwich Generation members should prepare for?
TS:Under the 2017 Tax Cuts and Jobs Act, there's now a temporary, non-refundable credit that allows a taxpayer to take a $500 credit for any non-child dependent, such as elderly parents they are supporting. This is new for 2018. If you have three generations of a family under one roof, you would need to be prepared for a significant financial burden and instances that require additional room extensions to be added to your residence. There’s even the relatively new concept of installing a “granny pod” in the backyard. Have you seen them?
DP: I think so. They're quite interesting.
TS:They’re actually really, really cool. It's a small house that's installed in your backyard. Many of them are really quite nice. But really the question is who would pay for all of it? As mentioned, it's better to discuss finances as early as possible for these situations. What also happens to the Sandwich Generation is they just a stop saving for their own retirement because of the financial burden they're put in. My takeaway is plan, plan, plan. Talk to your trusted advisor to make sure the family's all set.
DP: That's some great information. Why don't you give us one of your New Jersey Historical Society fun facts?
TS: Of course. Did you know that you can thank New Jersey for many things? The first drive-in movie theater was located in Camden.
DP: I did not know that. I know that there's one left in New Jersey, Cape May County, I think.
DP: I'm not too young to remember going to some of those. Well, thanks again, Tim, for this valuable information. And thank you for listening to The Bottom Line as part of the EisnerAmper podcast series. Visit eisneramper.com for more information on this and a host of other topics, and join us for our next EisnerAmper podcast when we get down to business.
As NJ initiates paid sick leave, The Bottom Line examines the requirements for business owners, the five reasons for which employees can use sick leave, and what business owners should be doing now to ensure a smooth implementation.
The economy seems to be chugging along, with unemployment at record lows. The Bottom Line looks at why some of that optimism needs to be tempered and what companies need to do in an increasingly competitive recruitment landscape.
In this episode, Tim Schuster, from EisnerAmper’s Private Business Services Group, tells us why it is definitely not a good idea to be without a will. One key reason: Do you really want the state deciding how to dispense your assets?
The Bottom Line looks at some of the common IRS scams out there, who the bad actors target, what you can do to protect yourself, and what you should do if you fall victim to one of these scammers.
This episode of The Bottom Line examines the landmark Supreme Court decision in the Wayfair case on e-commerce taxation. Tim Schuster looks at what’s behind the decision, how broad the impact will be, and what you can do to prepare if you sell online.
Tim Schuster gives us The Bottom Line when host Dave Plaskow recently received a NJ Department of Labor questionnaire concerning some freelance writing assignments from a couple of years ago.
This episode of The Bottom Line takes a look at newly elected Governor Phil Murphy’s inaugural NJ budget. We’ll highlight some the proposed revenue raisers along with what’s on the governor’s shopping list and how these could impact state residents.
In this episode of The Bottom Line, Tim Schuster, discusses some of the individual taxation questions bubbling up from clients in the wake of tax reform including itemized, state and local, mortgage interest and qualified business income.
In this episode of “The Bottom Line,” EisnerAmper manager Tim Schuster talks about the seven questions he’s receiving the most from clients on tax reform including converting to a C corporation, the new meals and entertainment rules and beyond.
In this episode of “The Bottom Line,” Tim Schuster talks about the benefits of a retirement savings plan for companies.
Tim Schuster discusses how starting a college savings account – sooner rather than later – can help alleviate sticker shock for your child’s college education.
Tim Schuster examines the differences between health savings accounts, health reimbursement accounts and flexible savings accounts, as well as who funds the plan, who owns it, taxation, contribution limits and what happens to unused funds.
EisnerAmper manager Tim Schuster looks at several categories of Small Business Administration (SBA) loans. He covers what lenders examine in the approval process as well as how business advisors can help you make the most of the process.
In this episode of “The Bottom Line,” EisnerAmper’s private business services manager Tim Schuster tackles the issue of succession planning. Tim covers his prescription for a healthy business transition and challenges and underlying financial issues.
Tim Schuster, EisnerAmper private business services manager, discusses the need for proactive disaster planning. Tim gives a few areas that businesses can focus on to protect themselves, keep their operations running and maintain financial stability.
Tim discusses the different frameworks, including a company’s size and business structure, and where a business advisor can add value. For example, if you’re a mid-sized company, your accountant, banker and lawyer will all probably approach business strategy differently than if you’re a small company.