Saving for your own retirement is hard enough, but what happens when you’re still supporting children and elderly parents? You are probably part of the growing sandwich generation.
Last year, an Aviva report (based on ONS data) highlighted that people aged between 40-50 years of age are being financially squeezed.
Why? They are being labelled the ‘sandwich generation’ as they are seen as the financial filler between children and parents.
This means their financial commitments extend well beyond their own. And guess what? There are estimated to be around 17 million currently in this position.
On the one hand, they are still paying for their children. Possibly still in secondary education, maybe at university. This will be a considerable annual cost.
On the other, these adults are likely to have parents aged between 70-90 themselves. For some of that elderly generation, adequate pensions were not arranged. This means they, too, might need help with money.
Are you one of the sandwich generation?
With life expectancy increasing, and care costs rising, there will be more support required by elderly parents in future years. This will mean more pressure on you.
Pension savings frozen out
With parents and children to consider, personal savings for the sandwich generation often get put on hold. That could be because there’s no spare cash each month, or that time to plan for the future just doesn’t seem to exist.
You must make time. Demands on family finances now could have implications for retirement income further down the line.
It’s a tough balancing act. Everyone wants what is best for their children. And who doesn’t worry about their parents as they get older? They helped us for years and we must support them in later life.
Many other family expenses also put a squeeze on finances.
Paying for driving lessons for that ambitious 17-year-old. Taking all the family (young and old) on that special holiday together. Holding that landmark anniversary party to celebrate your parents’ long and happy marriage.
It all adds up and makes saving for retirement for the sandwich generation much harder.
Don’t miss out on peak savings years
The worst thing anyone can do is put off their own retirement planning. As you reach mid-forties, the reality is that you might need access to your own pension within 10-15 years.
That golden period, when a pension pot has already grown, is often the peak earning time. Ideally, you will still be making payments into your fund.
You need to be in control of your finances, and that means having priorities and not over committing to helping children and parents.
That sounds like tough love, but put yourself under too much financial pressure and the worst outcome might see you unable to help yourself or others.
Reviewing your portfolio regularly should be a priority. It will give you a better picture of targets and goals. Your financial outcomes are just as important as others.
A sensible option at this stage of your life is to consider taking independent advice about protection policies. If an unexpected life event occurs, this could protect you and those who depend upon you.
Help for the sandwich generation savers
The message is don’t miss out because you’re supporting others. Get some impartial financial advice so that your savings are working for you efficiently while you help others.
It’s a balancing act, but getting the mix right is vital in the years leading up to your own retirement.
That’s what Logic Wealth Planning offers – a balanced approach to managing money and savings.
There’s no pressure, no hard sell, just a willingness to understand what you want from retirement and what you need from a pension.
You help your kids and parents; we’ll help you find balance and peace of mind.
Let’s get started: 0808 1234 321.