Retirement Planning for the Sandwich Generation

By Sharlen Miller

If you’re supporting both your children and your aging parents, you’re part of what’s often called the “Sandwich Generation.” It’s a role that can be deeply rewarding and financially challenging. Balancing the needs of two generations while preparing for your own future requires careful planning and creative strategies.

Here’s how to navigate the unique financial pressures this stage of life can bring

Understanding the Financial Squeeze

The Sandwich Generation often faces competing priorities:

●     Covering education costs or helping children get established.

●     Providing care, housing, or financial support to parents.

●     Continuing to save for their own retirement.

Without a plan, it’s easy for your retirement contributions to take a back seat, which can have long-term consequences.

Step One: Clarify Your Priorities

You can’t be everywhere at once, financially or emotionally. Start by determining what matters most.

●     Are you focused on paying off your mortgage?

●     Is funding your child’s education a top priority?

●     Do your parents require ongoing medical or living expenses?

Getting clear about your goals helps you make trade-offs intentionally rather than by default.

Step Two: Set Boundaries and Expectations

It’s common to want to give as much as you can to your loved ones, but it’s important to communicate limits.

• With children, be open about what you can contribute toward school or housing.
  
  

• With parents, discuss care needs, available resources, and how to share responsibilities among siblings.
  
  

• Clear expectations can prevent misunderstandings and help you avoid taking on more than you can handle.

Step Three: Protect Your Retirement First

It may sound counterintuitive, but prioritizing your own retirement is one of the best ways to protect your family. If you underfund your savings now, your children could end up supporting you later.

Continue contributing to retirement accounts and take advantage of any employer matches. Even small, consistent contributions can add up over time.

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Step Four: Build Flexibility Into Your Plan

Caring for multiple generations means your expenses can change quickly. You might suddenly need to cover medical bills, travel for family emergencies, or help a child through a job loss.

A flexible plan might include:

●     Maintaining a larger emergency fund.

●     Keeping a portion of your investments in liquid assets.

●     Reviewing your insurance coverage regularly.

Step Five: Seek Out Tax-Efficient Strategies

Tax rules can be especially important for the Sandwich Generation. Medical expenses, education savings plans, and certain caregiving costs may offer tax advantages. Coordinating withdrawals and contributions across different accounts can help you keep more of your income working for you.

Step Six: Consider Professional Guidance

Managing the needs of multiple generations while protecting your own future can be complex. A financial professional can help you weigh trade-offs, create a sustainable plan, and navigate tricky tax or investment decisions.

You can explore resources from TruNorth Advisors to learn more about strategies that align with both your current obligations and long-term goals.

Retirement planning for the Sandwich Generation is a balancing act, one that demands clarity, boundaries, and flexibility. By staying intentional and protecting your own future, you can continue supporting those you love without sacrificing the security you’ll need in the years ahead.

(NG-FA)

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