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  • Writer's pictureLeyder "Aiden" Murillo, MBA

Mastering the Financial Balancing Act for the Sandwich Generation

Updated: Oct 26, 2023


Mastering the Financial Balancing Act for the Sandwich Generation

At Wolfpack Wealth Management, we understand that juggling your financial priorities as a member of the Sandwich Generation can be challenging.


The Sandwich Generation refers to individuals caring for their aging parents and growing children, often feeling sandwiched between these responsibilities.


Yet, with both generations to support, balancing meeting their needs and securing your financial future is essential. In this article, we'll provide some valuable insights and strategies to help you navigate this unique stage of life, including a recent example of how we assisted a client with tax planning for their retired parents.


Establish a Strong Foundation for Retirement

As a member of the Sandwich Generation, you are likely in your late 30s or 40s. This age is a crucial time to prioritize retirement savings. Maintaining a solid retirement plan is the center of your financial seesaw, keeping everything in balance. While it can be tempting to cut back on retirement savings to address immediate needs, remember that the money you save now has more time to grow and compound. In addition, maxing out your retirement contributions and utilizing Healthcare Spending Accounts (HSAs) can help you build your nest egg while reducing your tax liability.


Balancing College Savings and Aging Parents' Expenses

Effective planning is essential for children and parents, depending on your support. To tackle college expenses, consider the following steps:

  1. Research the college selection process, set a realistic budget, and prioritize scholarships and merit awards.

  2. Complete the FAFSA, even if you think you don't qualify.

  3. Utilize 529 plans for tax savings, even if college is approaching.

  4. Incorporate college expenses into your overall cash flow plan.

Regarding your parents, initiate open-ended conversations to understand their desires and concerns. From there, you can address practical matters such as expenses, insurance coverage, and necessary legal documents. Research local resources for assistance, including elder councils and veteran services.


Mastering the Financial Balancing Act for the Sandwich Generation

Our Experience: Tax Planning for Retired Parents

We recently had a potential client contact us for tax planning solutions for their aging parents. Their parents, fully retired and living on a fixed income, faced a high tax burden due to the lack of tax deductions because they did not plan accordingly before retirement. We worked closely with the client to identify potential tax-saving strategies tailored to their parents' situation, ultimately providing them with different techniques to minimize their tax liability and preserve their retirement income.


Safeguard Your Financial Wellbeing

While caring for loved ones, ensuring your assets and liabilities are adequately protected is crucial. Evaluate your life insurance coverage, consider an umbrella policy, and investigate long-term care insurance to safeguard your future.


Develop a Comprehensive Cash Flow Plan

A cash flow plan connects your short-term financial activities to your long-term goals and can help you make informed decisions. This plan should include budgeting and a strategic assessment of debt refinancing, investment risk levels, and asset allocation.


Your Takeaways

Though the Sandwich Generation faces unique challenges, resources, and Wolfpack Wealth Management is available to help you navigate this phase of life. By implementing the strategies outlined in this article and seeking professional guidance, you can feel more secure in your present circumstances and confident about your financial future.

 

Ready to take control of your financial future? Schedule your free financial assessment and discover how working with a wealth management advisor is accessible and helpful in reaching your financial goals. Start building the future and wealth you deserve.

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