The Financial Hardships of the Sandwich Generation

Investing and saving can be hard enough when you’re NOT supporting anyone, but the sandwich generation gets a double whammy. That’s because they are supporting both their own children and their aging parents. As a member of the sandwich generation, you’re likely right in the middle or nearing the end of your own career, and you may still be finding your sea legs when it comes to investing for the future. Being pulled in two directions means there’s not much left over to save for YOU.

Your kids are likely in high school or college, while your parents are facing the increased need for you to care for them in their home or place them in a nursing home. How can you survive this time financially?

  • Retirement fund takes precedence. If you need extra cash, don’t reach for the retirement funds. Instead, dip into the college savings if you have to. You can always borrow for your kids’ school or have them take out loans; you can’t do the same for retirement, and you’ll never be able to get back what you lost by failing to contribute to 401(k)s and other investment tools.
  • Take the proactive approach. Even if you’re not at the point yet where your parents need full-time care and attention, it’s coming. Plan today so there are no surprises. Educate your kids on making good financial choices. Sock away what you can now. You will need it in one form or another.
  • Ask for help from your kids. If your children decide to come back and live in your basement after college, don’t let them stay for free. Adult children are more than capable of paying their own way, even if it’s just a few hundred dollars a month. Of course, they must be employed, but once this happens, don’t allow them to think this is a free ride. You have growing home care bills for your aging parents to think about, plus perhaps other children in college at the same time.
  • Make sure your employer knows your situation. It’s hard enough juggling the responsibilities of your own kids, but add in a parent with dementia and you can get stressed out very quickly. Your employer should be made aware of your home situation so they can be flexible as you work out these issues.
  • Keep up an emergency fund. Your emergency fund should contain between three and six months living expenses in case of a rainy day. You could lose your job, face an unexpected car repair or medical bill, or any number of emergencies that can crop up. This way, you can leave your college and retirement funds intact. As you use it, replenish it afterwards.
  • Investing in stocks is always a good way to grow your retirement account. If you have a broker handling your accounts, you should also have a securities arbitration attorney on your side as well.

With these tips, you can get peace of mind as a member of the sandwich generation.