BALANCING INTERGENERATIONAL NEEDS – ARE YOU CAUGHT IN THE MIDDLE?
Often referred to as ‘the sandwich generation’, many 40 to 60 year olds can find themselves providing financial assistance not only to their children, but also to their mums and dads. With increased life expectancy, many older people can expect to live well into their 80s and 90s, but may require assistance with daily living or need to go into residential care.
At the other end of the scale, families are having children later and it has become a well-publicised phenomenon that these children are often still, to some extent, financially dependent on their parents into their 20s or even 30s.
Financially, saving for retirement and supporting other family members is placing a significant burden on the sandwich generation, and in many cases severely reducing their capacity to save or invest for their own futures.
How to plan for your needs
Adopting a collaborative approach to financial planning can help ensure that parents are able to prepare for their future whilst looking after the needs of other family members. Openly discussing wealth matters as a family can help establish priorities, clarify goals and ensure that plans are put in place to support each generation as their needs dictate.
Almost a quarter of over-50s in a recent survey1 admitted that they sacrificed saving for their retirement to provide financial support to other family members, while 12% admitted they had stopped saving completely. Whatever age they are, everyone should make provision for their later years. Even small sums saved regularly will go some way towards providing a pension income. Getting good advice will help you work out how much you will have available to live on in retirement, and how you can improve your pension outlook.
1Aviva, Real Retirement Report, 2017