Squashed, spread too thin, nothing left. This is not how you want your lunch described, but for those who are part of the “sandwich generation,” these descriptions are all too accurate.
The sandwich generation is defined as those who are caught in the middle of both parents and children who rely on them for financial, physical and emotional support. During the COVID-19 pandemic, record numbers of adult children are moving back home while elderly parents may need more care, leaving those in the middle to make difficult choices between saving for their own retirement, funding education or living expenses for children, and paying for the health care needs of aging parents.
Who is in this sandwich generation? The burdens and responsibilities of middle-aged Americans is increasing. Nearly half (47%) of adults in their 40s and 50s have a parent aged 65 or older, and are either raising a young child or financially supporting a grown child age 18 or older, according to a nationwide Pew Research study. Adults who are supporting multiple family members report that this assistance has a significant impact on their own financial well-being. Among those who are providing financial support to an aging parent and supporting a child of any age, 28% say they live comfortably, 30% say they have enough to meet their basic expenses with a little left over for extras, 30% say they are just able to meet their basic expenses, and 11% say they don’t have enough to even meet their basic expenses. And if adults are not caring for their parents now, nearly 7 in 10 of the people surveyed said they expected to do so in the future.
If you are in the sandwich generation, and are providing financial, emotional or physical care to an aging parent, it is likely that you have thought about how you will want to be cared for in the future. I commonly hear from my clients that they want to make sure that they are not a burden to their children. But if your finances are being strained by the caregiving needs of your own parents and gifting to your adult children for their living expenses now, how are you supposed to be able ensure your own future financial independence at the same time? How do you decide whose needs come first?
Your top priority should be your own retirement
There are options for elder care and for financing educational needs for children … but there are not many safety nets for your own retirement. In this case, you are not being selfish by putting your own needs first – in fact, you are making it possible for you to help your family members by being financially stable yourself.
Tips for making sure you that you are on solid financial footing for your own retirement savings:
- Work with your financial adviser to develop …….
