A couple talking. [Photo|ak9.picdn.net]
Have you ever heard of the term “Sandwich Generation”?
It refers to those individuals faced with the responsibility of caring for two generations at once. They are the group of people who are the primary caregivers for both their young children and ageing parents. This usually occurs in people between their late 30’s 40’s and 50’s.
It comes as no surprise that with the pressures from catering to the two generations, who are equally demanding, young adults are struggling to achieve financial independence and often experience financial and emotional burnout. However, with every challenge, as they say, lies therein an opportunity.
Just like any other phase of your life, this is not one that is permanent. It comes and goes. So how do you cope with all the financial obligations facing the sandwich generation? While it can be highly challenging, and frustrating, with a good attitude and thorough planning, it might turn out to be one of the most rewarding phases of your life.
The reason why this dialogue is often avoided is that many feel uncomfortable talking about money. If you grew up not having the ‘money talk’, then it might be a little challenging bringing up the topic with your parents.
You can, however, be the first to break this barrier. Have a candid conversation with your parents and find out just exactly how far your parents have gone in terms of planning for their retirement.
This means engaging in discussions on issues such as medical treatment, wishes and plans should they no longer be able to take care of themselves, or how to pay for the care. This is important considering that some will outlive their retirement nest egg, and hopefully live well into their 90’s.
To ensure you and your parents are well prepared for whatever the case, consider the factors affecting retirement income such as return on savings and investments, how long the retirement period is anticipated to last, inflation, taxes, sending, part-time earnings, social security, pensions and so on and so forth. It is important to know your parent's financial situation.
While you are so busy planning for your parents future, you sure do not want to leave your children behind! Regardless of whether you have your parents to cater for or not, if you have children you should already be considering a financial plan to put them through higher education.
This even more so now that the cost of education seems to continually rise. Education planning does not necessarily stop at setting aside a monthly contribution to a college savings account.
By focusing on your own retirement, you can secure your financial future and change the cycle to ensure that your children will not have to go through what you are going through now!