Will You Be Funding Your Parents' Retirement? Here Are 3 Things to Do Today

Over the next decade, it's estimated that 1 in 7 Americans in the so-called "Sandwich Generation" will need to provide financially for both minor children and dependent parents simultaneously. And with the price of everything from childcare to adult daycare on the rise, it can be easy to be caught in a pinch between two generations. Fortunately, taking steps today can prepare you and your family's personal finances for the future.

1. Start on solid footing

Will your parents rely on you financially in retirement? If you're not sure, you're not alone. Most savers are thinking about funding only one retirement, not two. The best laid plans are grounded in a firm understanding of the facts, and having a candid conversation with your parents about their financial status is a vital starting point.

How we spend today can foreshadow how we will spend in retirement. If your parents don't have a budget, encourage them to create one. If they do have a budget, compare what they're spending today with what they can expect to earn in retirement. Consider Social Security benefits and pension payments as post-retirement income. If spending exceeds retirement income sources, retirement accounts can be an important supplement.

Next, understand your parents' net worth. Consider whether they have assets in accounts that can be tapped in retirement, and whether those assets are invested appropriately. Likewise, you should understand whether your parents are carrying large amounts of debt that will last through retirement. Funding monthly living expenses can be hard enough without balancing growing debt payments.

2. Expect the unexpected expenses

Pre-retirement spending is a good place to start when planning for post-retirement expenses. However, there are some important post-retirement expenses that may not show up today.

Medical expenses are a major component of every American's financial plan. While Medicare Part A is free, most Americans will need supplemental coverage, which can cost thousands of dollars every year. Additionally, 70% of Americans can expect to have a long-term care stay in retirement, and whether you pay out of pocket or purchase long-term care insurance, the cost of this care could blindside a senior.

3. Don't be afraid to seek help

Talking with a loved one about their financial situation can be difficult, but you don't have to do it alone. Engaging a fiduciary financial planner can be one of the most helpful ways for families to plan for their financial future.

Financial planners consider both the qualitative and quantitative factors when helping clients plan for retirement, allowing retirees and their families to be confident in their financial situation. In addition to providing an objective voice in the financial conversation, a planner can quantify unknowns and offer actionable recommendations to get you or a loved one on track toward financial security.

Understanding your parents' financial plan today can help you avoid unexpected financial burdens later in life. Begin the conversation by looking at hard data, and then consider the costs of medical care in retirement. Ask for help if you need it -- the services of a financial planner could go a long way toward setting you and your parents up to succeed financially.