Info for Consumers
		Privacy
		Advice@American Express
		Tips, Tools &
		Information
		Consumer FAQs

This Week's Article

Advice Archive by date

Advice Archive by topic

Juggling the three-fold obligations of the “sandwich generation”

The “sandwich generation” is that group of Baby Boomers who are trying to do three things at once – pay for their children’s education, support their aging parents, and save for their own retirement.

They’re stressed, and no wonder. Too many of them have saved at a low rate, compared to their predecessors, and have racked up substantial debt. 

Of course, some Baby Boomers stand to inherit considerable sums of money from an older generation known for its good savings habits. When that transfer of wealth occurs, Boomers may have an opportunity to play catch up with their finances. For those not so fortunate, it’s best to have a plan for making multiple goals more manageable. Here are some tips:

Review options available for caring for aging parents. The earlier you start, the more you can prepare both financially and emotionally – plus you and your parents can work toward mutually desired goals.

Consider different investment products (or vehicles) for different goals. Investing money in different investment vehicles for each objective will help you select suitable investments for the different time frames and cash flow requirements – for instance, consider achieving long-term retirement goals with, among other vehicles, stocks for growth and bonds for income; but keep short-term college funds in more conservative securities.

Look early into financial aid for college. Contact prospective colleges to learn what forms of assistance are available and how to apply for them.

Update your financial goals regularly. As you and your family age, financial goals will likely evolve. Advanced education, a wedding, or your first grandchild may translate into financial obligations for you, as will the consequences of a parent’s increasing dependence.

Strive to maintain control of debt. Make it a priority to measure what you want against what you really need.

Don’t forget about yourself. As you count down to the end of your career, make sure your retirement plan maintains a high rank among your financial obligations. Your 401(k) or other company-sponsored plan is one of the best ways to accumulate tax-deferred savings and obtain an immediate tax deferral (contributions reduce your current taxable income). Keep in mind that tax-deferred earnings aren’t taxed until withdrawn. Amounts withdrawn prior to age 59½ may also be subject to a ten percent early withdrawal fee. Once you’ve contributed the maximum allowance to your plan, you still may be eligible to save more through a tax-deferred traditional IRA or a tax-free Roth IRA.

Most important, if you’re starting to experience the squeeze of the “sandwich generation,” don’t panic. A knowledgeable financial advisor can help you find solutions for a multitude of competing financial goals.

December 7, 2000

American Express Financial Advisors Inc. Member NASD. American Express Company is separate from American Express Financial Advisors Inc. and is not a broker-dealer.

Copyright (c) 2000 American Express Company. All Rights Reserved. Users of this site agree to be bound by the terms of the American Express Web Site Rules and Regulations. View Web Site Rules and Regulations and trademarks and Privacy Statement of American Express. See Corporate Entities and Important Disclosures for additional information about the American Express entities who offer products and services on americanexpress.com. American Express Brokerage is offered by American Express Financial Advisors Inc., Member NASD and SIPC. American Express Company is separate from American Express Financial Advisors Inc. and is not a broker dealer.