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Sandwich Generation

Supporting Parents and Children? Remaining Solvent in the Sandwich Generation 

Planning for retirement is something most adults do today, thanks to longer lifespans, increasing awareness of retirement planning options, and employers that offer 401K plans and even contribution matching up to a certain percentage.  However, many adults in their 30s, 40s, and 50s are finding that their parents’ generation did not plan quite as well or didn’t have the same financial resources and education we have available today.

As a result, you might find yourself in the unenviable position of caring not only for your kids, but also for your parents as they become less able to do so for themselves.  Naturally, you want to make sure your parents are well-taken care of, and you want to give your own children the best future possible, including help paying for their college education.

However, this could leave you stretched pretty thin financially, and you may put your own financial needs and future last on the list of priorities.  After all, your parents need medication and nursing care now.  Your kids need clothing, school supplies, and college funds now.  The bad news is, you could end up with very little for your own retirement when the time comes, and find yourself leaning on your kids the same way your parents rely on you.

What can you do to break this cycle when you’re stuck in a generational sandwich of care?  In order to make sure you’re in a stable financial situation now and that you won’t be a burden when you reach old age, there are a few steps you’ll want to consider taking.

Corral Your Cash Flow

Your first goal should be to get your current expenses in order, which means creating a budget to ensure you’re covering your monthly bills and paying down any outstanding debt. The main objective here is to take care of the day-to-day expenses so you have something extra to sock away.  It’s imperative to have at least six months’ worth of expenses set aside in case you are unable to work for some reason, especially if you’re the sole breadwinner balancing everyone’s needs.

Take Advantage of Every Resource

You need to make every dollar count, especially for planned usage down the line.  Take advantage of any benefits your employer offers like 401K matching to maximize your retirement funding early (and really get that compound interest working for you), as well as flexible spending accounts that allow you to set aside pre-tax dollars for use on eligible expenses like childcare.

This could increase the value of your income and perhaps decrease your tax bracket simultaneously, helping you make the most of your money in two ways.  Don’t forget to take every tax incentive available to you, including child and dependent care credits you may be eligible for, and make sure your parents are receiving any SSI, Medicare, pensions, annuities, and so on that they’re due to help pay for the cost of their living expenses and care.

Don’t Take on the Burden Alone

If you have siblings or other family members that can help with care of elderly parents in any way, either with money or time, don’t hesitate to tap those resources.  You may be superwoman, but you certainly don’t have to save the world alone.  When you take advantage of help, wherever it comes from, you have the best opportunity to manage your obligations, care for others, and take care of yourself, now and in the future.

Saving for your own future when you’re stuck in the sandwich generation isn’t easy, but partnering with the financial professionals at Women’s Financial Network gives you access to the financial planning, money management, retirement, and other services you need to make the most of your hard-earned money.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Photo by ameriswede on Flickr

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