Your 40s through 70s often bring a unique set of responsibilities. Many people in this stage of life find themselves supporting children, whether that means helping pay for college, contributing to a first car or home purchase, or offering a hand as they launch into adulthood, while also caring for aging parents who may need extra financial help, medical support, or simply more of your time. Being part of the “sandwich generation” can feel like being pulled in two directions at once, all while trying to stay on track with your own financial goals.
According to a study published in the Journal of the American Geriatrics Society, 24.3% of adults in the U.S. care for both parents and children. The researchers found that people caring for both their children and their parents reported more financial and emotional difficulties than those caring only for aging parents (Lei et al., 2022).
These years are also an important time for your financial future. Decisions made now can shape your retirement goals and your peace of mind. By recognizing common pitfalls and building intentional habits, you can care for the people you love without sacrificing your own financial security. Here are three ways to position yourself as you enter the sandwich generation.
1. Talk to Your Children About Their Future Plans
Children have many wants and needs and helping them understand the difference can build healthy financial habits early.
- Start early. Start conversations about future goals, college costs, and career plans while they are still teenagers.
- Point them to other resources. Encourage them to explore scholarships, student financial aid, and savings options.
- Set clear expectations. Work with your children while they are young to build a budget, and be clear about how much you are willing to contribute.
- Share the cost. Instead of paying off their car or college loan outright, consider covering a portion of it or matching what they pay.
- Consider a short-term move home. In some cases, having adult children move back home for a year or two so they can pay down debt or build savings can help them get on solid footing without eating into your retirement.
2. Help Your Parents Plan for Their Later Years
Talking with your parents about their finances early can help prevent unexpected financial stress later.
- Cover the big topics. Discuss their retirement savings, income sources, healthcare costs, insurance coverage, and long-term care plans.
- Bring in siblings. If you have siblings, involve them in the process so responsibilities can be shared.
Understanding your parents’ financial situation helps your family identify gaps and explore available resources before it becomes too late.
3. Prioritize Your Own Retirement and Know Your Limits
It is natural to want to support your children and parents, but your own financial security has to remain a priority. That means:
- Contribute consistently to your retirement accounts
- Maintain an emergency fund
- Set boundaries around how much financial assistance you can afford to provide
Taking care of your own financial future puts you in a stronger position to support your loved ones.
Moving Forward
Without a proactive financial plan, people in the sandwich generation may find themselves sacrificing retirement savings, delaying major financial milestones, or depleting their own funds to support loved ones. With the right plan in place for both your parents and your kids, you can protect your own financial future too.
Let’s Build a Plan for Everyone You Care For
At Alaska Wealth Advisors, we help families balance supporting loved ones with protecting their own retirement. Whether you’re helping a child through college, planning ahead with your parents, or both, we’re here to help you find a path that works for everyone.
Ready to start the conversation? Call our team at 907-272-7575.
Rama Dandekar
Associate Financial Advisor
This material reflects the author’s opinion, is not intended to be investment, tax, or legal advice, and is provided for illustrative purposes only. Alaska Wealth Advisors is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about Alaska Wealth Advisors’ investment advisory services can be found in its Form ADV Part 2 and/or Form CRS, which is available upon request.
Sources
Lei, L., Leggett, A. N., & Maust, D. T. (2022). A national profile of sandwich generation caregivers providing care to both older adults and children. Journal of the American Geriatrics Society, 71(3). https://doi.org/10.1111/jgs.18138
