Column: Retiring For The ‘Sandwich Generation’

[Written by Carla Seely]

Alot of people who are getting close to their retirement age are being faced with really difficult challenges and are having to make some really tough decisions.

The hardest hit is the “Sandwich Generation”, the generation which is trapped between financially providing for their own children and being responsible for providing financial assistance to their elderly parents.

Now, if you are lucky enough not to be sandwiched, think about how soon you might face this challenge and how long those obligations could last. In this situation, early planning can go a long way to easing emotional and financial strain.

An article in the Daily Mail on September 2015 stated “Middle-aged parents are forced to balance working full-time while spending an extra 19 hours every week caring for their older relatives, with a third paying towards their care. Meanwhile they are spending nearly £6,500 a year on children aged 22 and over.”

So how could this impact you?

The younger you are, the more likely you are to be sacrificing your own financial goals for others, however, even the middle aged “sandwichee” are leaving themselves financially exposed as they support older parents into aged care.

The bad news is, with elderly parents, they tend to play their cards close to their chest and chances are you will not be aware of their true financial picture until you are called upon to help them financially.

Understanding your elderly parents’ needs, goals and resources is a first step to managing a sandwich situation. Although discussing money can be a delicate matter, open communication is an essential piece to planning your parents future needs. It is important to remember if you are being pulled in many directions not to lose sight of your own needs and financial goals.

The good news is, if your children are adults and still at home or if they are away at university, hopefully you are getting a handle on your finances as you will know what your financial commitments are during this time. It is only natural for parents to want their children to be successful in all aspects of their lives, but teaching your children the importance of financial independence is just as important as making sure they get a good education.

My recommendation to all my clients is to set money aside sooner than later and a great way to do this is through voluntary contributions into your company pension plan. The additional funds can be taken off your paycheck directly and invested through your company pension plan. Depending on your company pension plan rules, when you actually need to access the voluntary money it will be available to you as the funds are not locked-in.

Although there is no golden rule or simple solutions for the “Sandwich Generation”, by ensuring you have open lines of communication between the old and the young, setting ground rules and making sure your own retirement goals can be met, then you are moving in the right direction to avoid being sandwiched.

- Carla Seely is the Vice President of Pension and Investments at Freisenbruch-Meyer, if you would like any further details please contact cseely@fmgroup.bm or call 441 297 8686

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