We have or adopt our kids older than in previous generations. And just as we are building our families, our parents and grandparents are living longer and may not have the resources to pay for a lengthy life in retirement.
When you add the needs of your modern family to those of your aging relatives, an economy that might be treating you harshly and your desire to make sure your kids are well raised, educated and launched, you’ve got a challenging tangle of financial choices.
The idea of a comfortable retirement might seem like an unattainable dream. After all, where are the funds going to come from after you’ve paid for the health aide for your parents, put money in your kid’s 529 plans and created some sort of rational daily life? It’s enough to reach for the bottle (or the Xanax).
If you are right in the middle of these divergent needs and wants, welcome to the sandwich generation. You know the emotional toll of making these big choices. But make them you must.
It starts with clarity and focus and understanding your personal landscape. What can you do to prepare—to the best of your ability—for your future? What choices do you have today?
Retirement for example, is increasingly rare as an option. The question is when it occurs and whether you have any control over the decision. If you work for a company, retirement might be dictated by company policy or you might have to summarily retire after a corporate debacle beyond your control. If you are self-employed, retirement might be determined by your health or the health of the company you have built. In either event, it IS coming.
Paying for college on the other hand, is a choice. Maybe you want to send your kids to Harvard, but can you realistically afford that option? The $240,000 that currently costs could spell financial disaster for your family. You’ll want to explore options like community colleges, state schools, scholarships, work co-op arrangements and student loans (within reason) that can help keep college costs in check.
When it comes to caring for your aging parent(s), see if this can be a shared responsibility with your siblings or extended family. Starting a dialogue now will save precious emotional energy later. And don’t forget to explore whether community or government assistance can contribute to their care.
The reality is, your retirement IS approaching (think of this as a ‘need’) and if you choose to ignore that in favor of making ‘want’ choices—like paying $60,000 a year for private university costs—you are headed for a serious financial reckoning. And no, depending on Social Security as your sole retirement plan would be delusional.
Unless you are swimming in bucks, there are hard choices to make—with financial, tax, legal, medical and emotional aspects to the path ahead. Finding the right team of advisors to help you is critical to both clearly define and ultimately reach your goals. They’ll help you get clear on “the immoveables”, so you can create the best possible future for yourself and your modern family.