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.
Lindsey Gross of EisnerAmper’s Outsourced Finance and Accounting Group joins Tim Schuster from Private Business Services to discuss the differences between these two areas, client case studies that demonstrate those differences, and which types of client could benefit from each.
The Bottom Line looks at how you can use social media to grow your business and examine the different communication platforms available including Facebook, Twitter and LinkedIn. You really need to develop website content and push it on social media platforms.
Tim Schuster, a manager in EisnerAmper's Private Business Services Group, discusses new NJ legislative initiatives happening in Trenton that you should be aware of. The first is the New Jersey Family Leave Act and the second is the increase in NJ's minimum wage.
In this episode of The Bottom Line, EisnerAmper Private Business Manager Tim Schuster discusses developing a quarterly planning calendar, including budget, tax planning and speaking with your trusted advisor. Review these concepts monthly from an accounting perspective.
In the wake of the government shutdown, Tim Schuster offers tips on creating an emergency fund. To avoid living paycheck to paycheck, Tim suggests putting money into a separate savings account, as well as a portion of any windfalls. Emergency funds should include medical expenses.
As New Jersey initiates paid employee sick leave The Bottom Line examines the requirements for business owners. Some reasons for which employees can use sick leave include an employee's own personal medical treatment or legal services, or that of a family member.
EisnerAmper’s Private Business Services Group Manager discusses the current unemployment rate and the booming economy despite current trade tariffs. To help attract employees, businesses are offering incentives such as assisting with student loans to attract millennials.
EisnerAmper’s Private Business Services Group partner discusses estate planning and the need to have a will - from an online provider or an estate planning professional - to help your heirs understand your estate asset wishes and the Tax Cuts and Jobs Act estate tax thresholds.
The Bottom Line looks at some of the common IRS scams out there and what you should do if you fall victim to one of these scammers, including email and personal data hacks, ID theft and fraudulent returns. Contact your accountant if you think you’re a victim of a scam
The landmark Supreme Court decision in the Wayfair case on e-commerce taxation allows states to collect sales tax on e-commerce companies, even without brick and mortar locations in that state, affecting all e-commerce companies such as Amazon. Accountant guidance is suggested.
This podcast discusses the New Jersey Department of Labor and the employee or independent contractor (freelance work) classification under new Tax Cuts. A DOL audit might look at your Facebook and LinkedIn, and can also change your employee or contractor classification.
This episode of The Bottom Line looks at New Jersey Governor Phil Murphy’s inaugural NJ budget. The discussion includes the Governor's proposed New Jersey's state tax on Uber and Airbnb, addressing tax loopholes for hedge funds and New Jersey tax's effect on the gig economy.
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 adjusted gross income changes, private business taxation, QBI, and the importance of talking with your tax advisor.
This episode of “The Bottom Line” discusses new tax reform changes including C corp and individual taxpayer changes, NOLs, double taxation and bonus depreciation. Tim Schuster came up with a top seven list of business tax reform questions he's been receiving from clients.
In this episode of “The Bottom Line,” Tim Schuster talks about the benefits of retirement savings plans for small businesses, including SEP IRAs, SIMPLE IRAs, and Solo 401(k) plans, as well as eligibility and contribution limits set for small business contributions.
Tim Schuster discusses how starting a college savings account – sooner rather than later – can help alleviate sticker shock for your child’s college education. He talks about the different state-sponsored 529 plans, what you can use the money for, the tax benefits and more.
EisnerAmper’s examines the differences between different Health Spending Accounts including HSAs, HRAs and FSAs. It is recommended you speak with your tax advisor about qualified medical expenses and pending tax reform's affect on health spending accounts.
EisnerAmper's Tim Schuster looks at several categories of SBA loans for working capital. He covers the loan approval process, SBA 504, real estate exclusions and how business advisors can help you make the most of the Small Business Administration (SBA) loan process.
EisnerAmper’s Tim Schuster tackles the issue of succession planning - Companies should have something written down for succession planning purposes as well as take into consideration estate planning, wealth management and valuation when creating their transition plan.
EisnerAmper's private business manager, Tim Schuster discusses the need for proactive disaster planning for private businesses, as well as business interruption insurance in the event that your disaster planning fails. FEMA offers online disaster planning recovery courses.
In this episode, Our private business services advisor Tim breaks down what a closely held business is, the different business formats such as LLC LLP and S Corp, and how this impacts the role of business advisors so your accountant, banker and lawyer will all be on the same page.