Sandwich Generation & their Finances

Sandwich Generation is the term used for people who care for their aging parents while supporting their own children.

India is known for it’s family values since ages, when an Indian speaks of family he does not limit it’s meaning to spouses and children. The Circle of Care in Indian families embraces all generations.

With Increase in Life expectancy and a generation of young adults struggling for financial independence the burden and responsibilities shift to the Middle Aged who still have to build their own retirement nest.

The phenomenon is not new, but the dynamics have changed considerably, families are smaller than they once were, so there might be fewer siblings to share the burden and with more women in the workforce having the extra responsibility of yet another person to care for squeezes their time which also leads to extra burden on the couple.

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How should you Plan ?

As you have two sets of dependents leaning on your financial house, be sure it’s strong and sturdy.

  • Maintain a Decent Contingency/ Emergency Cash Reserve
  • Take appropriate Insurance covers for yourself – Protecting your family from the risk of your disability or death is more important than ever.
  • Take sufficient cover for long term health for yourself and your family – Proper Insurance coverage will reduce your burden financially in case of any eventuality
  • Do not belittle the importance of your own Retirement Planning, continue with your savings – If at all possible, don’t use your retirement savings—whether through loans or early withdrawals—to support your kids or parents. Withdrawing from your retirement funds could leave you inadequately prepared for retirement and force your children to support you financially. You should break the cycle.
  • For Eduction Cost of your child opt for Education Loan

How to deal with both sides ?

Your Children : Your children are watching and learning from you. Have an open dialogue with them on importance of financial planning. Children raised with money management skills will be better prepared for their own financial success.Prepare a Financial plan and save accordingly for children education and marriage.

Your Parents : Know your parents’ total financial picture, help them in managing their funds. Help them in their Estate Planning. Take special care that they are safe, make necessary changes in the house required for the elderly. Devote some quality time.

Above all, be realistic about what you can do. Don’t expect too much of yourself, either emotionally, physically or financially.

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