The growing responsibilities of being part of the Sandwich Generation can be daunting. Here, we provide tips on how to manage life’s pressures.
A lot has changed in the nearly 40 years since the term ‘Sandwich Generation’ was first coined. More women are nearing retirement, their aging parents are living longer, their adult children are staying home longer and they may now have grandchildren to help care for as well.
Research shows an increasing number of women have become entrepreneurs, self-made millionaires, and joined the ranks of the high net worth. And whether they created the wealth themselves or are beneficiaries, they’re increasingly afforded a seat at the table and becoming much more active in the financial decision making process – a shift wealth management professionals say has been particularly notable over the last 10 years.
The independence and power women have gained from their wealth have helped relieve some of the burden that comes with being part of the ‘Sandwich Generation,’ even as the responsibilities of that generation appear to have increased.
Commissioned by RBC Wealth Management, The Economist Intelligence Unit (EIU) undertook a study of high-net-worth individuals (HNWIs) from March to May, 2018. The survey covered 1,051 individuals (502 women and 549 men) in Canada, the United States, United Kingdom and parts of Asia (mainland China, Hong Kong and Singapore). The new face of wealth & legacy survey explores how the meanings of legacy and wealth are being redefined across regions, genders and generations.
For one RBC Wealth Management client, having to suddenly care for her elderly mother in addition to raising her own teenage children was a wake-up call to figure out how she was eventually going to pass along her wealth. Succession planning was a door the client had previously kept firmly shut.
“Before this life event happened, she wouldn’t touch this issue,” says Oliver Saiman, a relationship management director at RBC Wealth Management in London. Part of the client’s push-back was driven by the fact that she was growing her second business, working hard, and doing well.
“We don’t like to think about what happens after our death, but it’s a prudent thing to do,” says Saiman, while also acknowledging that it can be an incredibly difficult – even taboo – subject to raise with certain clients.
The new face of wealth & legacy survey shows 62 percent of respondents globally say their relationships with family are important in their definition of legacy. There’s also an overwhelming importance of using professional financial resources. According to The EIU research, 78 percent of respondents agree financial services are more important to personal wealth planning now, than in previous generations.
Being sandwiched between two different generations can be a daunting position, but for the growing class of HNW women, their wealth at least affords them some benefits in choosing a caregiving plan and paying for the help they need.
“Of course, with that … ‘power’ – also comes much responsibility. And whether you call it the ‘guilt’ gene – I don’t think it goes away however much money you’ve got,” says Fiona Lucas, managing director of sales and relationship management in London with RBC Wealth Management.
“People I’ve dealt with, they tend to be perfectionists, so they want to be the greatest moms, the greatest employees, and the greatest boss. They’re unrealistic goals to have all at the same time, and that can cause a lot of stress.”
Those in Asia may feel a particular responsibility to care for their elderly parents. The EIU research shows, for example, 47 percent of respondents in Singapore are caring for aging parents, a figure dramatically higher than the 15 percent of Americans and 17 percent of UK residents in the same position.
“Elderly care is something the Western world is particularly poor at,” says Saiman.
Lucas’ own experience in Asia saw her working with more women in senior positions than anywhere else in her 25-year career, but at the same time, she saw how families lived more communally – different generations of a family residing under the same roof – than in Europe or North America.
The multi-generational responsibilities that come with this kind of living arrangement can be a burden from a financial and caregiving perspective, but also a benefit due to the built-in family support system, says Lucas. Practical considerations like housing can make economic sense, and for those above a certain economic threshold in Asia, domestic staff is also quite common.
Along with seeing a growing number of women becoming high-income earners and decision makers, wealth management professionals like Lucas and Saiman are also seeing more female spousal beneficiaries and adult children being included in family wealth planning conversations from an early stage.
There is still a long way to go, but it’s happening significantly more today than even 10 years ago, says Saiman, adding that RBC Wealth Management tries to connect and foster unique relationships across multiple generations within a family.
Whether it’s due to the experiences of the ‘Sandwich Generation’ or not, women in decision-making roles also want a better understanding of the ethical, social and economic impact of their businesses and investments. When they look at the legacy they’ll leave in the world, “they want to be sure their footprint is appropriate,” says Lucas.
And in fact, that sentiment is supported in The EIU research, where half of female respondents globally say the ability to create change with their business through corporate giving is more important now, than two generations ago. That’s in comparison to 40 percent of men who agreed with the sentiment.
Lucas and Saiman offer some essential tips to help ease some of the pressure on women new to the wealth planning space, who find themselves in both the role of family caregiver and wealth caretaker.
Don’t wait until a “wealth creation event” – such as the sale of a business – to begin thinking about succession and legacy planning. Speak with your adviser and have discussions with your family.
Take the time to figure out what’s best for you and your loved ones.
This answer could take time and involve many intense conversations with your partner or fact-finding discussions with your peers to figure out what’s best for your family.
Include your children as early as possible in the conversation. Introducing them to philanthropy could help set the stage for later conversations around legacy. The average age in which children inherit wealth is 29, says Saiman, but the average age in which conversations about inheritances start is 27. Two years is very little time to lay important groundwork with your heirs. And in an age where so much personal information is readily available with a Google search, it’s smart to get ahead of the conversation with your children.
Know in advance where the accounts and important documents are, such as a will, their contents and how to access them. Ensure your will is up-to-date and educate yourself about the family bills and how to pay them.
“It’s amazing how many people forget those things,” says Lucas, who has frequently seen HNW clients struggle with simple financial tasks following the death of a partner, who had previously handled the family finances. “You’re starting from a very basic level … when tragedy strikes, people don’t necessarily have the emotional capacity to handle the practical things like ‘how much do I have to live on? How do I pay the bills?’”
While women have increasingly become part of the family wealth decision-making process, they still tend to be less tuned in to the day-to-day tasks. Being aware of even the small details of running the home is just as important, says Lucas.
According to The EIU research, 42 percent of females globally say they are the secondary decision maker when it comes to financial planning, compared to just 29 percent of men.
Don’t be afraid to ask what may seem like basic questions. “This is about being in control of your destiny,” says Lucas. “Knowing where things are and how things work enables you to make better decisions.”
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