THE sandwich generation is a term that refers to grown adults (usually in their 40s and 50s) who provide financial support for their children and parents simultaneously.

They are “sandwiched” or “caught in the middle” of two generations. With an ageing population and more women having children at a later age, the phenomenon of a sandwich generation persists. Some adult children aged 18 and over who are in colleges and universities are still dependent on their parents for financial support. There are also other adult children who are unemployed and some who are working but are still dependent on their parent or parents for financial support. At the same time, these parents are confronted with increasing health care and other costs regarding the well-being of their own parents. This creates tremendous pressure on the sandwich generation, which also needs to ensure its own needs are addressed. Oftentimes, people in this group sacrifice their needs in order to meet the needs of the living parent/parents and provide support for their young or adult children. Additionally, some members of the sandwich generation are also responsible for the care of their grandchildren. This can exacerbate an already stressful situation.

The average citizen in some Latin American countries will spend half of his/her life in the sandwich generation. In developing countries women are primarily the provider for ageing parents, dependent children and even grandchildren. These added responsibilities have placed some adult women in a precarious position considering that females have a longer lifespan than men and generally are in lower-paying jobs, with reduced saving, and inadequate funds in retirement.

The impact on retirement planning

The sandwich generation faces numerous challenges, such as depression, guilt, indebtedness, strained relationships, time management due to the psychological impact of being torn between different interests. This generation struggles with planning for retirement. It’s a balancing act in identifying priorities. Studies by the Pew Research Centre show that the sandwich generation in America consists of 23 per cent of the adult population. Each member of this group has at least one parent who is age 65 or over and is financially responsible for at least one child under the age of 18 years or contributing to the financial well-being of an adult child. The report suggests that more than half of Americans in their 40s are in the sandwich generation. When it comes to retirement planning, adults in their 40s and 50s should be well on their retirement journey.

Globally, members of the sandwich generation are at risk of living comfortably in retirement. This, therefore, requires public policies and private strategies to encourage saving for retirement and easy access to social programmes that provide training, financial assistance and guidance to members of the sandwich generation, their parents and adult children. Financial literacy should be a key component of any social programme or public policy, especially for the sandwich generation.

It’s important to start investing early in life. A habit of saving every month, beginning with the first pay cheque will ensure that adequate resources are in place for investing and spending in the future. Always have a well-resourced emergency fund, which should consist of three to 10 months of living expenses. This will ensure that saving and investing for retirement are not derailed because of the responsibility of caring for ageing parents, young or adult children simultaneously.

Another good strategy is to make maximum contributions to formal pension plans. Review pension plans regularly and seek the services of a qualified and experienced financial advisor. Create a spending budget. Know where your money goes. Siblings can also share financial responsibility of their parents. Health and life insurance needs must also be assessed and reviewed. Adult children should be encouraged to contribute financially to their household and become independent. They should seek to access scholarships or work and study.

The sandwich generation should practise paying themselves first, like a bill, that’s the ideal way to take care of the future needs of loved ones.

Grace G McLean is financial advisor at BPM Financial Limited. Contact her gmclean@bpmfinancial. and visit the website: www.bpmfinancial.com. She is also a podcaster for Living Above Self. Email her at livingaboveself@gmail.com