Are You Part Of The 'Sandwich Generation'? Here Are 7 Tips To Managing Your Situation

This post is sponsored by Lincoln Financial Group.

For most adults, taking care of your parents as they get older is an inevitable part of life. But nearly half of Americans in their 40s and 50s are now forced to juggle supporting their aging parents and their adult children. People in this situation are now known as the "sandwich generation."

According to a 2013 Pew Research Center survey, 21% of adults in their 40s and 50s provided some form of financial support to a parent age 65 or older, while a sluggish economy has forced nearly half of those adults to provide some form of financial support to a child 18 or older.

This added financial strain can wreak havoc on those trying to save for their retirement. While it may be tempting to dip into your savings or empty out your 401(k) to help support your family, it's important to maintain your own financial security. Here are a few things to keep in mind for those who want to balance their financial needs with those of their aging parents and financially dependent children.

1) Get your finances in order.

In the case of an emergency, airlines always advise passengers to put on their oxygen masks before assisting others. Well, the same can be said for your personal finances. It's best to secure your financial situation prior to supporting other generations, or else you may risk jeopardizing your entire financial future. It's not fair, nor is it wise, to go into debt supporting your parents or adult children if you haven't even figured out your own retirement plans.

2) Create a plan.

Before you're in a situation in which you're fully supporting your parents, you should sit down and create a plan for them. Review any life insurance plans they may have as well as legal documents like power of attorney, healthcare proxy, and living wills. Also, be sure to discuss their plans for what do to if they fall ill, and most importantly, how much you can contribute without spreading yourself thin.

3) Look into getting long-term-care insurance.

Healthcare costs for aging parents, like in-home health assistance and stays in a nursing home, can add up quickly. If your parents haven't already planned for long-term care, it's a good idea to get started by researching insurance options.

4) Ask for support.

Caring for an aging or ailing parent puts not just a financial strain on your life, but also an emotional one. If you have siblings, you shouldn't be the only one taking on the challenge. Have a candid conversation with your family about how to share the costs and time of supporting your parents.

5) Set limits with your children.

Dealing with an unemployed or underemployed adult son or daughter? While it's natural to want to nurture and protect your kids, at this age it's important to talk with them about how much you are willing and capable of supporting them. Don't spread yourself thin if you can't afford it. If they plan on moving back in (or never moved out), let them know they're responsible for contributing - whether that's paying rent or the electrical bill, doing housework, or picking up groceries. Any little bit helps.

6) Seek tax breaks.

Got a college kid living at home with you? There's a tax break for that. Parents can claim children up to the age of 24 as long as the child has lived with them for more than half the year and the parents have provided at least 50% of their financial support. Dependents - including your parents - can save you up to $3,700 on your taxes. If you pay, again, more than half of your parents' living expenses, you can file them as dependents, even if they don't live with you.

7) Review your life insurance.

If you find yourself the sole financial provider for both your parents and adult children, then you need to plan for what they would do if something unexpected happened to you. It's a good idea to review and even increase your life insurance during this time to ensure your loved ones are covered, no matter the circumstances.

Learn more about life planning on the Lincoln Financial Group's website.

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