Financial Planning for the Sandwich Generation

Here are a few things to consider to help you maintain your financial well-being.

Three generations of women sitting in a park

by NEA Member Benefits


Teachers may be the ultimate multi-taskers, what with managing curricula, classrooms, students, administrators and families. But most educators are not independently wealthy, so juggling multiple financial needs can be a real challenge. This is true if you’re in your 30s trying to balance a mortgage with saving for college and retirement on a 10-month pay schedule. And it’s especially true for sandwich generation teachers over age 50 who may have to add financial and personal support for elderly parents into the mix. A recent study found that nearly half of Americans aged 55 or older expect to provide support for aging relatives and adult children.*

Make yourself priority number one

If your family needs you, it’s natural to drop everything to help. Whether it’s grown children losing jobs or elderly parents needing assisted living, you want to be there for them. And you should. Just make sure you take care of yourself first. If you put yourself in financial jeopardy, you’ll not only limit the financial help you can provide to others, the resulting stress may turn you into the one needing help.

Regardless of the number of outstretched familial hands you may face, you need to keep your retirement savings plans on track. So continue contributing to your 403(b) retirement plan. There are plenty of government and private assistance programs, along with loans, to help with college costs or elder support, but not for your retirement.

Make a realistic life course plan

Parents heading into a nursing home or grown children moving back home are major life changers and not events to solve on the fly. So plan ahead for different possibilities.

  • Have “the talk” with your parents — Ask your parents about their finances and if they have the means to cover a long-term illness or extended nursing home care. Discuss their end-of-life wishes.
  • Talk with siblings and other family members — Discuss the steps you might have to take in a worst-case elderly parent scenario. Nursing homes can easily run $50,000 to over $100,000 a year depending on location. If there’s no insurance to cover the cost of care, how will you divvy up the financial and hands-on responsibilities?
  • Have a plan to help the kids — If your adult children run into problems, how will you get them back on their feet? Will you just give them money outright or make or co-sign loans that must be repaid? Will you allow them to move back home? If so, will you charge them rent? What types of boundaries and move-out timetables will you set? Getting clear about how you might handle these situations before they crop up will give you the confidence to make smart decisions that benefit everyone.
  • Manage your debt and protect your assets — Carrying loads of debt with high interest payments can keep you from getting ahead of the finance game. Try to pay off your non-mortgage debts and use the money you save to build an emergency cash fund. Protect your hard-earned money and assets by having sufficient health insurance, life insurance, homeowner’s insurance and disability insurance. When you reach your late 40s or early 50s, consider long-term care insurance. The earlier you buy long-term coverage, the lower your premiums will be.

The bottom line

Boomers of the sandwich generation are getting squeezed from all sides. With careful planning, you can make some tough decisions a lot easier. If you remember to take care of yourself first, you can avoid undermining your own retirement and ensure that you have the most resources—financial and emotional—to offer your family.


*Source: 2011 SunAmerica Retirement Re-Set Study.