Home Financial responsibility It’s tough, but the sandwich generation should stand firm

It’s tough, but the sandwich generation should stand firm

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The average citizen of some Latin American countries will spend half their life in the sandwich generation.

THE sandwich generation is a term that refers to grown adults (usually in their 40s and 50s) who simultaneously provide financial support for their children and parents.

They are “sandwiched” or “caught in the middle” of two generations. With an aging population and more women having children at older ages, the sandwich generation phenomenon persists. Some adult children aged 18 and older who attend colleges and universities still depend on their parents for financial support. There are also other adult children who are unemployed and some who work but still depend on their parent(s) for financial support. At the same time, these parents face rising health care and other costs for the well-being of their own parents. This creates enormous pressure on the sandwich generation, who must also ensure that their own needs are met. Often people in this group sacrifice their needs in order to meet the needs of the living relative(s) and provide support for their young or adult children. Moreover, some members of the sandwich generation are also responsible for the care of their grandchildren. This can exacerbate an already stressful situation.

The average citizen of some Latin American countries will spend half their life in the sandwich generation. In developing countries, women are primarily the providers of aging parents, dependent children and even grandchildren. These added responsibilities have placed some adult women in a precarious position given that women have longer lifespans than men and tend to work in lower-paying jobs, with reduced savings and insufficient funds in retirement.

The impact on retirement planning

The sandwich generation faces many challenges, such as depression, guilt, debt, strained relationships, time management due to the psychological impact of being torn between different interests. This generation is struggling to plan for retirement. It is a balancing act in identifying priorities. Studies from the Pew Research Center show that the sandwich generation in America makes up 23% of the adult population. Each member of this group has at least one parent aged 65 or over who is financially responsible for at least one child under the age of 18 or contributing to the financial well-being of an adult child. The report suggests that more than half of Americans in their 40s belong to the sandwich generation. When it comes to retirement planning, adults in their 40s and 50s should be well into their retirement journey.

Globally, members of the sandwich generation are likely to live comfortably in retirement. This therefore requires public policies and private strategies to encourage saving for retirement and easy access to social programs that provide training, financial assistance and counseling to members of the sandwich generation, their parents and their children. adults. Financial literacy should be a key part of any social agenda or public policy, especially for the sandwich generation.

It is important to start investing early in life. A habit of saving each month, starting with the first paycheck, will ensure that adequate resources are in place to invest and spend in the future. Always have a well-endowed emergency fund, which should consist of three to 10 months of living expenses. This will ensure that saving and investing for retirement is not derailed by the responsibility of simultaneously caring for aging parents, young children or adult children.

Another good strategy is to contribute as much as possible to formal pension plans. Review pension plans regularly and seek the services of a qualified and experienced financial advisor. Create a spending budget. Know where your money is going. Siblings can also share financial responsibility with their parents. Health and life insurance needs should also be assessed and reviewed. Adult children should be encouraged to contribute financially to their household and to become independent. They should seek to access scholarships or work and study.

The sandwich generation should practice paying themselves first, like a bill, it’s the perfect way to take care of the future needs of loved ones.

Grace G McLean is a Financial Advisor at BPM Financial Limited. Contact her at [email protected] and visit the website: www.bpmfinancial.com. She is also a podcaster for Living Above Self. Email him at [email protected]