Sandwiched

A little while back I made a post on LinkedIn about the difference in support that new parents receive from those around us versus the isolation that people in their 40s, 50s, and 60s are feeling with aging parents and young adult children.

I am not the first to point it out, hence the now well-established term, "Sandwich Generation." Despite the well-known struggles, I haven’t come across a baby shower version for those navigating helping their kids and parents while not forgetting their own life.

Maybe this is a symptom of society today. "It takes a Village." I think this applies to just about everything. With families spread out and people working longer, today our village is mostly services we pay for. Daycare for the young and assisted living for the elderly. In the middle though, the Sandwich generation is still trying to do it all: helping their kids with college and homeownership while keeping their parents in their own home.

In my post, I asked questions that people have asked me:

When and how to use the 529 plan?

With college expenses as high as they are, it is rare for parents to cover the cost solely from their 529 plans. So the question becomes, "When should I tap it?" For our daughter who is around age 2 now, I have chosen the age-based investment strategy. It starts with a growth approach to investing and gradually gets more conservative as she gets closer to college. I like this because it is automated; I only need to think about how much I am saving. When it comes to spending the money, here are some things to consider:

• Will my child pursue grad school?

• What are interest rates on student loans?

• How much do we have saved?

Your goal could be to cover the first four years and the rest is up to them, or maybe you want to cover grad school because they have solid grants and financial aid for undergrad. Another important note is that unused funds in a 529 can potentially be rolled over into a Roth IRA. You can read more here. Your goals for the 529 plan should help you decide when to tap it.

Can I help my kids with a down payment; will there be a gift tax?

This question breaks down into two areas: can I afford it? And what should I know about gift taxes? Big gifts like help with a down payment can be scary when you are retired. When you aren’t working anymore, all you have is your savings, investments, and Social Security/Pension, so a big expense often feels risky. It can be, but one-time expenses often have less impact than we might imagine; it’s really the ongoing expenses that have the biggest impact.

The next step people worry about is the tax consequences, for which there could be many or none at all. You may have heard of the annual gift tax exclusion.

• You can give your kids or anyone for that matter up to $19,000 during 2026 without the gift itself requiring any extra tax filing or tax.

• Married couples can each give $19,000.

• Example: You want to help your daughter buy a house, so you and your husband each give $19,000, equaling $38,000.

• Say that's not quite enough; you can give your daughter's spouse the same amount, so another $38,000. Now totaling $76,000.

• Say you want to give $100,000 total; surely then you will have a gift tax?

• Not quite; you would be required to file a gift tax return for 2026, but the extra $14,000 would count against your lifetime gift exemption that is currently $15,000,000 for 2025.

Source of Funds: Where is the money for the gift coming from (cash, investments, retirement accounts)?

• Cash: Straightforward; just write a check, wire, or electronic transfer. No capital gains taxes to worry about.

• Investments (Taxable Account):

  • Sell and Gift Cash: The giver is responsible for paying capital gains tax on any profit.

  • Gift Stock Directly: The recipient is responsible for any capital gains tax when they eventually sell.

• Retirement Accounts (e.g., IRA): The giver must withdraw the money, pay income tax on the withdrawal, and then gift the remaining cash.

It’s important to talk with your tax advisor about your situation; this is not advice and should not be taken as such.

I need to help my parents pay bills; should I create a joint checking account? (Invest in legal advice)

Heard this from a friend? When it comes to ownership of assets, please, please, please, get your advice from Estate & Elder Law Attorneys. Most people need to update their documents anyway, such as wills, power of attorney, health care proxy, etc. Your friend's "helpful" advice can come at the cost of unintended consequences. I’ve seen accounts get garnished by the IRS because someone stopped paying taxes. As a financial advisor, part of how I view my job is a connector to other professionals where and when it’s needed, along with helping my clients implement that advice.

My parents have accounts all over the place; what do I do?

Keeping track of your accounts and letting your loved ones/trusted people know where they are and what they are is important for us all. Passwords, bills, and financial accounts are critical to our day-to-day. Eventually, we all die, and some of us will also become unable to manage our finances before we die. Much of what an "Estate Plan" covers is who manages all this when we can’t, and by whom. Bad advice here can be costly. Lawyers who specialize in this area create a plan with contingencies and listen to what you want to happen.

So, who helps you?

Your financial advisor should be, and if they aren’t, it could be time to graduate to a new one. Market predictions aren’t all that helpful when life happens. Investments are important, and it is a big part of my practice, but it isn’t the only important aspect of your financial life. Why do you invest? This is an important question that should be asked and answered. At TWM, it’s important that your investments align with your life, where you are now, and where you are going. Creating a financial plan helps to plan for where you are going and helps us coordinate how much to save, how to invest, how to spend from your investments, and how to protect what you have. Coordinating with your accountant and lawyer and helping you find one is also key. The modern day financial advisor has moved far beyond investment management as they have realized the growing demands their clients have.

The information in this blog is the opinion of Nathan Tomkiewicz and does not reflect the views of any other person or entity unless specified. The information provided is believed to be  reliable and obtained from reliable sources, but no liability is accepted for inaccuracies. The information provided is for informational purposes and should not be construed as advice. Advisory services offered through Tomkiewicz Wealth Management, LLC, an investment adviser registered with the State of New York and Massachusetts.