There are a growing number of people in this country that are taking care of their parents. While the older generations need more of their children’s care, those sons and daughters are having their own kids. When you find yourself in the position in which you take care of both your parents and your kids, you are part of the “sandwich generation.” Being in this predicament can be very rewarding, but it can also be pretty draining. Research by the Pew Research Center shows that even those who don’t financially support their parents and their kids, the emotional support aspect is still there. this can take time, attention, and money away from retirement, and that just will not do. So, let’s get some tips for how the sandwich generation can prepare for retirement.
Retirement First, Assistance Second.
Just like the airplane safety monologues say, put on your mask before helping others with theirs. In order to make sure that your kids don’t have to end up in the same situation you are, you need to put your retirement savings first. So, set your monthly budget for your retirement account and stick to it. Make sure the moment you get paid, that money goes straight into the account, before any goes to assisting parents. this may seem harsh, but it is essentially you making sure that you break the cycle of parental dependence. It is vital that we ensure the future of our own kids, while still making time to help others. The priorities are where you need to make the tough, but necessary, decision.
It can be really tough to set enough money aside to retire. The good news is, most people slowly grow their retirement contributions over the course of their life. this means that there is no shame in putting only a small amount into your retirement savings every month. You can always ramp it up later on down the road, but don’t throw your hands up because you’re putting in “practically” nothing. Practically nothing is a whole lot better than actual nothing, especially with compounding interest. So, if you can only afford a hundred a month, save one hundred a month. Not only will it add to your account, but it will get you in the habit of putting that money away every month.
Choosing Accounts That Will Grow
When it comes time to save for retirement, you don’t want to just be stashing all the money in your regular savings account. 401(k)s and Roth IRAs are a great place. You can allocate tax-free money into these accounts, and as long as you don’t pull it out early, it stays that way. Not only that, but your employer will most likely match a certain amount of your contributions, leading to a whole bunch of free money. The auto-allocation method you can use helps as well, setting up automatic withholdings into the account so you don’t even have to think about it.