The Aging Sandwich Generation: Where to Find the Finances You Need to Retire

Written by Olivia Bailey

Finding yourself in a situation where you need to take care of your parents while looking after your own family at the same time can be a real body blow to your finances. Without careful planning and some good fortune the consequences to your future can be worrisome. You might feel you need to put your retirement plans on hold while under such budgetary strain, but there are ways to balance the books and keep your goals on track.

Here are some suggestions to organize your finances to cope with immediate financial pressures and plan for current and future expenses. Consider this an overview of some of the financial challenges you might face and some tips on ways to find the cash you need now and in the future.

Plan ahead to stay ahead

The odds are in your favor you will live to an older age than previous generations, which is great news in one respect, but presents a financial challenge when you try to plan your finances to have enough money to live out your golden years in comfort.

Add in the additional complication of looking after one or both of your parents who are over 65 along with the financial support you need to provide for your children and you can see why this scenario makes saving for your own retirement seem like a bridge too far for your finances.

There is no question that you want to provide support for your parents and children when they need it. The trick is to organize your finances so your own future prosperity and comfort is not thrown into question.

When it’s time to pool your resources

If you find you need to provide for your elderly parents, both emotionally and financially, the subject is not open to debate for most of us who assume that degree of responsibility without a second thought.

The financial consequences of such commitment can be significant. Your own financial situation can quickly deteriorate unless you find a way to pool your resources to reach a solution that provides the help they need and makes the most of the money available in the family pot.

Attitudes towards money have changed in recent generations but elders often have an ingrained reluctance to discuss their finances even with their children. However, it makes a lot of sense to try and overcome this barrier by addressing key issues like estate planning, medical insurance, current income and expenses, and any other relevant finances to gain an accurate insight into their financial position and future financial security.

Perhaps you can find a way to persuade them to downsize from their existing property, for example, to something more suitable and cheaper. This could help ease their own financial burdens and in turn relieve the pressure on you.

Explain to your elderly parents the value of an in-depth look at their finances. A thorough review could be beneficial and may result in a greater annual income than they currently enjoy, which would reduce the burden on your finances at the same time.

It is always a good idea to explore all the possibilities and options as part of the potential solution that could help everyone. It could even lead to a situation where you pool your resources and combine your finances to provide a way forward that works for everyone.

Getting them through college

College is a major financial event for parents. If you are struggling to find money to meet all those college expenses, there are some options to assist with your efforts. You can find a college near home where they can go so they don’t have to move out and you won’t have board and living expenses.

Don’t forget to check what financial aid you might be entitled to or whether your child might be able to get a scholarship.

It is a challenge to get young adults through college without racking up huge debts. But if you can plan and prepare and somehow stay on top of things you will have negotiated one major financial hurdle without putting too much of a dent in your retirement plans.

Lower your monthly commitments

If you are paying off several credit card debts each month as well as loan repayments, it might be worth looking at consolidation as a way of making your debts more manageable. It could make sense to find out before you apply whether this solution could work for you.

Sit down and work out your current monthly budget to see where your money is going each month. Find where you can cut back on some outgoings that could then go towards your retirement plans.

Putting your feet up might seem a distant dream at certain times when your finances are under so much pressure, but you can and will find a way to see it through and enjoy your own retirement at some point.

Olivia Bailey writes about a range of personal finance matters in her online articles. When not typing up a new article she’s busy with everyday family life, raising 3 kids and keeping home for a hubby.

Retiring and Your Finances: Ways to Keep Your Cash Flow and Credit Going

Written by Georgina Taylor

Retirement is a great thing to look forward to: you’ll be able to spend more time doing what you love and you won’t have to worry about the daily responsibilities a life-long career requires. Once retired you will be in control of your time and free to be as active or relaxed as you choose. Yes, the best days are yet to come.

Unfortunately, many people are not financially prepared to live a life without having to work for a living. Without enough money coming in to pay the bills and still have some left over for you, you may find yourself in a downward spiral that affects your credit score, making it harder to find relief. Managing your finances on a fixed income is the most important thing you can do in retirement so you can enjoy the fruits of your labors. Here are some helpful hints.

Know Your Budget

Knowing exactly how much money you need every month to live is very important. This will help keep you from failing to pay loans, credit card debts or mortgages that you are responsible for.

First, figure out how much you will need for living expenses: house payments, food, insurance, gas and electric, phone, internet, any medicines you pay for – anything you cannot miss a payment on. Secondly, choose an amount to set aside each month for emergencies: you never know when you’ll need access to cash because of an accident or other unforeseeable event. One rule of thumb says you should set aside enough to cover all your expenses for six months. Finally, think about any short-term investments you want to make and set aside a little for those.

Everything left over is yours to do as you please.

Keep Your Credit Score Up

By paying your bills on time, you lessen the risk of your credit dropping in retirement. This can help you for future purchases, like finally buying that dream vacation home or helping your grandchildren through college.

Although you’ll be on a fixed income, make sure to pay off debts as soon as you can to avoid problems. Even though you are retired it is important to keep your score high. Should you need to improve your score, there is software to improve your credit score. The service provides you with credit reports from agencies, identity theft tools, as well as various reports, charts and graphs to assist you in your efforts.

Don’t let your credit score slip just because you retire: stay on top of everything and you’ll have plenty of great days ahead.

Look for Ways to Reduce Fees

Surcharges and fees for basic things like bank accounts and credit cards should be a big no-no during retirement. A few fees here and there can really add up if you are on a fixed income.

Look for ways to eliminate fees by using newer technology. Find a bank that offers free direct deposit so you can have all of your checks go into the account without a yearly fee. You can also choose online banking to move money around without penalties. If you use a credit card why not one gives you points toward future purchases? The more ways you can find to eliminate fees, the better your financial situation will be.

Consider a Reverse Mortgage

If you are over 62, you may qualify for a reverse mortgage, which will allow you to forgo your mortgage payments. This is a great way for older retirees to save some cash to use for other bills and purchases.

With a reverse mortgage you use the equity built up in your home to pay for your loan, so the more equity you have, the better. This can really take the burden of a large monthly payment off of your shoulders so you can enjoy your retirement. If you take a reverse mortgage, although you won’t have any payments you will still be responsible for property taxes and your homeowner’s insurance.

Open Direct Deposit

Chances are, once you retire you will be receiving money from several different sources. You may have a pension or 401K that you draw from each month or dividends from stock or social security. If you don’t learn to manage these sources quickly, you may find yourself with less money than you planned.

Having each of these sources deposited directly into your savings or checking account eliminates the need to keep track of everything. Funds instantly arrive in your account the moment they are disbursed, so you don’t have to worry about forgetting to deposit a check. This way, all of your money will be easily countable and retrievable, giving you one less thing to worry about so you can enjoy your retirement.

If you manage your money right, there’s no reason retirement can’t be a great time without financial worries!

Georgina Taylor works closely with those approaching retirement age to get their finances in order. She is a personal finance consultant for the over 50s and shares her knowledge around the web.