One of those catchy new phrases used to describe demographic groups is the “Sandwich Generation.” The title refers to middle-aged adults (often in their 40s and 50s) who are caring for both elderly parents and their own children. According to Crystal McMahon, CFP®, EA, the Managing Director of Arrowroot Family Office in Tacoma, “Typically in your late 40’s or early 50’s you are at your peak earnings, and it is the best time to make a dent in creating your nest egg.” But for those in the Sandwich Generation, balancing all your responsibilities may come at the expense of building your retirement.
McMahon has several pieces of advice to better balance your retirement planning. Start with having a frank, but loving conversation with your parents about their expectations and how prepared they are financially to meet their own care needs. There still may be time to adjust their own retirement planning. Leveling expectations goes a long way to ensuring less conflict and stress later.
Second, look at your own finances by tracking a three- month, non-holiday season expense budget. Analyze where you are currently spending and determine if changes are needed. “The biggest thing I see from people in this age group is that their expenses are too high because of spending on Amazon, eating out too often, and subscriptions to unnecessary products,” said McMahon. McMahon serves as the family’s financial coach guiding clients from unconscious spending to conscious competence.
And third, if you’re a parent yourself, have a heart to heart with your kids about how and why you are reducing your expenes. Reorganize their expectations to better align with your expectations regarding dining out and other areas where you plan to reduce expenses.
The money you save from these changes should be thoughtfully invested in tax-deferred investments that you can draw on in retirement. How much you need for retirement has so many variables based on the lifestyle you want to live and what other forms of income you will have to support you besides the money you have accumulated on your own.“Raising your kids can be such a blur, you lose sight of the big picture and retirement sneaks up on you,” McMahon said. It really comes down to ‘are you willing to make the adjustments?
For Additional Information
Arrowroot Family Office
arrowrootfamilyoffice.com
BY LYNN CASTLE