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Surviving the sandwich generation: caring for parents and children

Are you part of the ‘sandwich generation’? That’s the generation caring for their ageing parents while also supporting their own children. If so, here’s some ways to help you better survive being sandwiched between the two.

What is the ‘sandwich generation’?

The global phenomenon of the ‘sandwich generation’, which describes the generation responsible for the welfare of both their ageing parents and their own children, is thought to affect over 1.5 million people in Australia.

As a result, many people in the prime of their earning careers are finding themselves financially and emotionally stretched as they work hard to meet the needs of both their parents and children. And while it’s a difficult position to be in, for many it seems unavoidable.

With the life expectancy of Australians continuing to rise (we’re currently the third longest-living nation in the world1) and adult children choosing to stay at home longer to save for their own home, the squeezed middle continues to grow.

Facing up to the challenge

While being part of the sandwich generation may feel overwhelming, it’s worth facing up to the challenge by putting in place an action plan to best manage the situation.

Often this will mean planning in advance, being honest about your financial and emotional objectives, and sometimes having difficult conversations.

Firstly, sit down, either by yourself or with your partner, and think about what you want from the next few stages of your life.

As Peter O’Callaghan, Partner at MSI Taylor Wealth Management puts it: “Financial objectives are always underpinned by emotional objectives. It’s about deciding what’s important to you, what your priorities are, and establishing a flexible strategy that will empower you to achieve your goals.”

This may involve having some open and honest conversations with your dependents about your expectations, and how you can work together to find a way forward. It can also mean investigating what resources are available to you within and outside the family, such as government benefits.

Importantly, try not to lose sight of the longer-term picture even when the here-and-now is demanding you to.

While being part of the sandwich generation may feel overwhelming, it’s worth facing up to the challenge by putting in place an action plan to best manage the situation.

Keep your retirement goals on track

If you have a limited capacity to save money, salary sacrifice into your superannuation is a great way of boosting your savings rate, suggests O’Callaghan.

“By setting up a salary sacrifice arrangement with your employer, you are able to start saving straight away. The strategy is highly flexible, which means you can adjust the level of contributions to suit your changing cash flow needs,” he says.

“Salary sacrifice does not require borrowing, yet it provides an immediate ‘return’ in the form of an upfront tax saving. This is represented as a net increase in the amount saved.

“It’s a really smart way of boosting long-term savings while staying focused on the demands of the present,” he says.

Make sure your savings work hard for you

It’s easy to forget about saving when life comes with so many expenses, but saving a little today pays off in the long run, especially if you have a good investment strategy in place.

It’s important to choose an investment asset allocation that suits your risk profile and objectives.

“If you have more than five years to invest,” says O’Callaghan, “Use an asset allocation with a weighting towards growth assets to ensure a return in excess of the inflation rate.

“A well-diversified managed fund lets you access a broader range of investments, and/or asset classes chosen by an investment professional. If you have a preference for a particular investment there will likely be a fund that suits you.”

Good advice can help

It may seem like a long road, but if you face up to your situation by putting the right processes in place, you can navigate from being stuck in the middle and successfully come out the other side. For good advice tailored to your situation, it can help to speak with a financial adviser.

Colonial First State Investments Limited ABN 98 002 348 352, AFSL 232468 (Colonial First State) is the issuer of the FirstChoice range of super and pension products from the Colonial First State FirstChoice Superannuation Trust ABN 26 458 298 557. Colonial First State also issues interests in products made available under FirstChoice Investments and FirstChoice Wholesale Investments. This document may include general advice but does not take into account your individual objectives, financial situation or needs. You should read the relevant Product Disclosure Statement (PDS) and Financial Services Guide (FSG) carefully, assess whether the information is appropriate for you, and consider talking to a financial adviser before making an investment decision. The PDS and FSG can be obtained from or by calling us on 13 13 36.