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Financial Tips for the Sandwich Generation

Financial Tips for the Sandwich GenerationMany adults in their 30s, 40s and 50s are feeling more than the usual pressure to get their financial lives in order. Not only are they concerned about saving money for their kids to go to college and for their retirement, but they are also caring for aging parents.  Dubbed the “sandwich generation”, these adults are simultaneously caring for their children and their parents.  With this extra responsibility also comes challenges for planning a family’s financial future.

For our Solidarity Members who find themselves in the “middle of the sandwich”, or for those who want to plan ahead, below are a few financial tips to keep in mind.

Make a Plan

Even if you are not currently caring for your parents, you should make a plan in case you need to do so.  This will include careful budgeting of your current income and resources, while also looking toward possibilities in the future.  For example, if you need to begin caring for an aging parent, will you need to scale back your work schedule or shift from full-time to part-time?  How can you scale back your living expenses to accommodate this shift in income?  Any plan needs to consider budgeting and savings for a majority of scenarios.

Pick Your Financial Priorities

If you are caring for an aging parent, you may not only be providing them physical support, but financial support as well.  Be sure to have a healthy savings account ready for these types of changes to your lifestyle and income, or start to build one now if this may be on the horizon for your family.  Will you need to postpone saving for your kids’ college for a time period while supporting an aging parent or parents? Adjust your retirement savings?  Make your plan based on YOUR priorities and stick to it.

Commit to an Annual Financial Check-Up

Sit down with your financial advisor at least once a year to review your retirement savings, college savings and investments and make adjustments.  A recent SunTrust survey of 519 adults with incomes $75,000 and up found that among those in middle age (ages 45 to 54), just 37 percent say they are saving enough to live comfortably in retirement, compared to 57 percent in other age groups.  Make your advisor aware of adjustments to your financial portfolio and savings as a result of changes in your caregiving role.

Make a Plan with Mom and Dad

Before you are in the situation of caring for aging parents, sit down with them and have a conversation about their wishes.  Have they already purchased long-term care insurance?  If not, it may be worth the cost over the long term.  Would they prefer to live independently in an assisted living facility and be transitioned to a full-time care facility if the need arises?  Or, would they rather remain in their home with home-based help?  Finding out their wishes ahead of time allows you to plan for those costs, further lessening the financial draw on your resources.

Coordinate with Siblings and Family Members

Include your siblings and other family members in the planning conversation.  Does it make sense for you to chip in for long-term care coverage for your parents?  How can you better divide up the financial needs of your parents over many months and years? Is there a sibling who will head up health care decisions while another controls the finances? Identifying the needs of your parents before they arise and having a plan in place will lessen both the financial and emotional stress on your family.  If you have adult children, involve them in the conversation as well.

Get Your Own Financial House in Order

The #1 thing you can do now is to make sure your own financial house is in order.  Remember that meeting with the financial planner we mentioned earlier? Now is the time to discuss how to better beef up your savings, whether it be for your emergency fund, retirement or kids’ college accounts.  Doing that now will lessen your stress if you take on the responsibility of caring for your aging parents.

Solidarity is here to help as you take on the additional challenges of caring for parents, retirement savings or sending kids to college.  Learn more about our Savings options to help you prepare for your future at  

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