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Indiana Securities Division

Securities Division > Indiana Investment Watch > News You Can Use > Money Clip Tips - The Sandwich Generation: Stuck between your parents and your kids Money Clip Tips - The Sandwich Generation: Stuck between your parents and your kids

Originally published July 2012

As a member of the Sandwich Generation you might feel overwhelming financial burdens; managing not only your own finances but also those of your children and parents.  However, you are not alone, the Pew Research Center reports that “nearly 10 million boomers are now raising kids or supporting an adult child while giving a financial hand to an aging parent”.  Being a part of this generation can have some serious financial impact, but it does not have to.  The best way to avoid the financial stressors of the Sandwich Generation is by being prepared and understanding all aspects of your situation including your parent’s finances, your child’s future financial needs and your own financial well-being.  

                Part of your responsibility as a Sandwich Generation member is protecting your elderly parent’s financial future.  Elders are often targeted for investment fraud because of their age and their accumulated wealth.  Take a two-sided approach to helping your parents avoid falling victim to investment fraud (which in turn might cost you an arm and a leg). First, get the facts.  With your parent’s permission, know and understand their financial situation, have copies of their estate planning documents and know the locations of their assets.  You should also be aware of who they get financial advice from, be it a financial planner, a lawyer or a doctor.  Second, make sure your parents know how they might be targeted for investment fraud and how to deal with it.  Share these tips with them:

-Never disclose financial or personal information unless you are confident

of the legitimacy of the person and the safety of your information

-Never meet a salesperson alone in your home

-Do not rush to fill anything out and be sure you understand what you are

signing (never sign a blank document)

-Beware of things that require “Immediate Action” or if a salesperson says

“you must act now”

-Always check the registration with the Securities Division of Indiana

Secretary of State

-When in doubt, just say NO!

-Report fraud; if you feel as though you or someone you know has been

the victim of fraud, report it to the Securities Division of Indiana Secretary

of State

Between the rising cost of higher education and the likelihood of having a ‘boomerang’ child (one that returns home after traditional ‘parental responsibilities’ have been completed), you might be thinking about dipping into your retirement fund.  Don’t!  This not only hurts you, it will probably force your children to have to help support you in your retirement, just like you might be supporting your parents now.  Instead, teach your children responsible financial management at an early age.  Have open conversations about household finances and even let them help make decisions (age appropriate of course).  The younger kids learn healthy money habits, the more likely they will succeed on their own.  Also, set realistic expectations about how your child can contribute to their education expenses and what will be expected of them if they do return home after college (i.e. contributing to the household income).  If you have not saved up enough for their college, there are lots of options out there to help you pay (taking money from your retirement fund is not one of them).  These include grants, scholarships, student loans, parent loans, 529 plans, work-study plans and various payment options. 

Trying to balance your parents finances and preparing for your children’s future, may leave your own finances in a less than ideal place.  This could leave you vulnerable to investment fraud.  If you are in need of money you might miscalculate how much risk you can really afford to take when you invest or you might jump into an opportunity before really investigating it.  Take steps now to avoid these issues.  This includes examining your financial position so you know what you have and what you will need in the future.  Once you have done this, create a realistic budget and keep your debt to a minimum.  If do not have enough in your retirement fund currently, figure out how to get there; know your investment goals and how much risk you can actually afford to get you to where you need to be.  ALWAYS check with the Securities Division of the Indiana Secretary of State prior to investing or taking advice from any agent by calling 1-800-223-8791 or by using the online searchable database at www.IndianaInvestmentWatch.com.