Survival guide for the sandwich generation: How to balance caring for parents and kids

While it’s crucial to care for both your parents and children, you must also secure your own future. Integrating retirement planning into your financial plan will ensure that you don’t become a burden on your children

Feeling 'sandwiched'? Effective planning can help take care of your parents, children and your own retirement needs

 

Navigating life in one's 40s is a journey full of twists and turns. Just when you think you have everything in order — career, personal goals, and family — new challenges emerge.

The most overwhelming of these, often, is ensuring a secure future for one's children and ageing parents.

This is the reality for many in the ‘sandwich generation’— those sandwiched between the demands of supporting elderly parents and raising children. It's no easy feat. One major concern is outliving our savings. We must navigate rising living expenses, especially in urban areas, while balancing short and long-term obligations. This needs comprehensive planning that goes beyond just investments.

FIND your financial balance

Here’s a strategy that can help guide you through this.

Family-first funding: prioritise setting aside a portion of your income for your family's needs, before other expenses. This means allocating funds for essential family-related financial goals, such as healthcare for parents and education for children, as a first step in your financial planning.

Income stream: develop additional sources of income, such as rental properties or side businesses, to provide extra financial security. This added income can be earmarked for future needs or unexpected expenses, helping you stay on top of your responsibilities.

Navigate investments: diversify your investments across equities, debt, and insurance to meet different financial requirements. This ensures that you are not putting all your eggs in one basket and can optimise returns while managing risk.

Daily review: regularly assess and adjust your financial strategy to ensure it's on track with your evolving needs. Life is unpredictable, and a flexible plan will help you adapt to changes without derailing your financial goals.

Must-dos to take care of ageing parents

For retired parents living on fixed incomes, financial support can be critical. Rising costs, especially healthcare, can quickly erode their savings without careful planning. Here are some strategies worth considering:

Income stream for parents: look at products that offer a reliable income stream, ensuring your parents can manage their daily expenses without dipping into their savings. Annuities, in particular, provide guaranteed income for life, which is invaluable during retirement.

Growing health costs: healthcare costs can be significant. Tailored health insurance plans that cover critical illnesses are essential to protect your parents' savings and ensure they receive quality care when needed.

Senior citizens' savings schemes: government schemes like the Pradhan Mantri Vaya Vandana Yojana can provide steady income. Additionally, low-to-medium-risk mutual funds or equity investments offering regular returns can be part of a diversified strategy to ensure stability and growth.

Preparing for your child’s future

Today, many children aspire to pursue higher studies abroad. This requires early and substantial investment to cover tuition and living expenses. You should look at investing every month in market-oriented instruments to create a large enough corpus over the long-term for their education.

Don’t ignore your own retirement

While it’s crucial to care for both your parents and children, you must also secure your own financial future. After all, your retirement will one day depend on the groundwork you lay now. Integrating retirement planning into your strategy ensures that you won’t become a financial burden on your children.

As a member of the sandwich generation, you face significant challenges daily. But remember, every decision you make today impacts the legacy you leave tomorrow. It’s time to take control. Review your investment strategy, set clear goals, and take actionable steps towards securing your family’s future.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions. 

Anup Seth is Chief Distribution Officer, Edelweiss Life Insurance