You’ve heard your friends talk about it. You’ve seen the news reports. You’ve read the social media posts. And then one day, you wake up and you’re in the middle of it.
The Sandwich Generation.
That’s the term for people who feel the crunch of caring for an aging parent, financially supporting their own children, and trying to plan for retirement—all at the same time. Nearly half (47%) of adults in their 40s and 50s find themselves in this stressed-out demographic. If you’re not there yet, chances are you will be someday.
So, what do you do when you’re faced with caring for parents, preparing for kids’ college, and saving for retirement? You do what you can with what you have.
Saving for Retirement
If you’ve ever flown on a plane, you’ve heard the flight attendant talk about what to do if the cabin loses pressure. Oxygen masks will fall from the ceiling and you’re supposed to put your own mask on before you put the mask on any children. That’s because you can’t help anybody else if you pass out from lack of oxygen! The same applies to saving for retirement. You need to invest for retirement first. If you don’t, a time may come when you both need help and neither of you has the financial resources!
You need to invest 15% of your pretax income into your retirement plan, like a 401(k) or a Roth IRA. Continue to do this even when you feel the urge to use that money somewhere else. Otherwise, you’ll be in financial trouble later, and your kids will face the same dilemma—trying to take care of their parents, their kids, and their own retirement.
Caring for Aging Parents
Honestly, caring for your parents as they age can be tricky. They want to remain independent and self-sufficient, and you want to honor that as much as possible. You still need to talk with them about their money situation and their medical needs. Together, you need to map out a financial plan for their care as they get older.
Your parents may need to downsize their home or even rent. They may need to move into an assisted living facility. They may need to live with your sibling or you. Eventually, they may need to stay in a nursing home. None of these options are signs that you don’t love your parents. You are giving them the best care possible in the situation.
If your parents need help, talk to your family and spouse first. Be in total agreement on what you can afford to provide. Set your boundaries and let siblings and other family members know how you can contribute. You can only do what you can do, so don’t get guilted into making bad choices.
Preparing for Kids’ College
Let’s face it. There’s no guarantee your kids will go to college and graduate. There’s a 100% chance you will retire someday—and it may come before you’d planned. That’s why you should always put money away for retirement first.
Your kids have options when it comes to paying for college. They can work and save for it early. They can work while going to school. They can go to community college. And they can apply for grants and scholarships.
On top of the scholarships list should be Dave Ramsey’s $55,000 Financial Literacy Challenge, sponsored by Zander Insurance Group! From April 7–25, high school seniors can enter for a chance to win one of three college scholarships, including one worth $40,000! Underclassmen can enter for a chance to win one of three Chromebook 2 laptops. Make sure your student enters at daveramsey.com/challenge.
In the Driver’s Seat
Ignoring your situation won’t make it go away. Instead, own the situation and look at your options. Then, as my grandmother often said, be prayerful and careful as you move forward. And remember, you are in charge of your own financial future.