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Retirement Strategies for the Sandwich Generation

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To the first-time reader who doesn’t know better, a term like “sandwich generation” brings up a pleasant image of being comfortably nestled between two warm slices of Americana. Guess again. Think vise grip, not bakery goods. That’s how much pressure is involved.

The term describes a state of being where an individual or couple is raising children and taking care of aging parents at the same time, while still trying to plan for retirement. It’s a tough situation. Doing it all successfully requires careful planning and financial discipline.

Let’s put ourselves into the sandwich for a few moments—you know what they say: Don’t judges someone until you’ve walked a mile in their sandwich. Or perhaps you’re already there. Maybe you’re on your way there and wondering if you need a personal loan to manage it. Either way, we’re going to cover some strategies that could make your life easier.

Make your retirement savings a priority

After you’re seated on an airplane and the doors have closed, a flight attendant stands up and does a short presentation about emergency exits and breathing masks that drop from the ceiling. They say, “Please put on your own mask before attempting to help someone else.”

It’s good advice in all areas of life. For those in the sandwich generation, make your retirement savings a priority. If you spend it all taking care of aging parents, your children will have to do the same for you. Do you really want to perpetuate that cycle? And do you trust them enough to put your golden years in their hands?

Even if your faithful brood does have the ways, means, and desire to care for you as you age, you’ll still be robbing them of generational wealth that could be accumulating interest or capital gains. Max out your retirement accounts. Everything else should come later.

Life insurance is a necessity

Don’t look at this as putting a price on your own head, even though it is. Life insurance is absolutely necessary when you have multiple individuals counting on you for financial support. What happens if you get hit by a truck or killed in the Zombie Apocalypse?

It’s not necessary to spend a lot on insurance. Term life is cheap, and you can set the benefit amount. Whole or universal life is more expensive, but it could be a good choice if you’re young and have small children. That cash value could come in handy later on.

As for other insurances, try to keep deductibles low so emergencies don’t empty your bank account. Take out life insurance policies on your parents, if that’s who you’re taking care of. Make sure you have disability insurance, just in case injuries prevent you from working.

Spend your parents’ money first

They’ll be eligible for Social Security at a certain age, but Medicare won’t kick in until they’re broke—so spend your parents’ money first. Get their assets down to zero as quickly as possible so the government can start paying its fair share.

Think of this as using existing wealth to help build new wealth. By slowly liquidating your parents’ assets to take care of them, you’re better able to properly care for and save money for your children. While you’re at it, spend a few dollars on yourself. You deserve it. #TREATYOSELF