Island Savings

Under Pressure: The Sandwich Generation

The importance of financial planning is ever more important for sandwich generation

More and more working Canadians are finding themselves having to take care of both their children and elderly parents. This is a growing demographic group, which experts have dubbed the sandwich generation. Made up of people in their 40s and 50s who should be taking the last few laps before retirement, this demographic is facing increasing financial pressures as they juggle careers, family commitments and personal well-being.

According to research published with Statistics Canada, 30% of Canadian professionals are balancing childcare and caring for older family members while trying to further their own careers and get ahead financially. The added personal and monetary responsibility can have very real short and long-term effects, says Island Savings branch manager, Jeff Knutson.

“Growing multi-generational care costs can hinder financial plans and prevent even the best savers from getting ahead financially,” says Knutson. “Families caring for both children and older relatives have greater day-to-day expenses and more spent today means less to put away for tomorrow. Over time this can easily translate into reduced savings or retirement income in the future.”

Additional studies also revealed employees who are caregivers experience high levels of stress due to their juggling responsibilities and that 20% of them have had to turn down a promotion because they were unable to take on additional responsibilities at work. A situation, Knutson notes, that can have a long-term effect on earning potential.

Given the sandwich generation will continue to grow as the population ages and as Generation Xers delay starting families, Knutson says it is important for people to be aware of additional family and financial responsibilities they may face.

“From paying down a mortgage, to child care costs, to caring for aging parents, to saving for their own retirement, it’s clear the sandwich generation is under a lot of pressure,” says Knutson. “It can seem overwhelming.”

Not surprisingly, figures from one study also showed 40 per cent of survey respondents reported high levels of overload both at work and at home. According to Knutson, having a solid financial plan in place can help prevent financial headaches from adding to the stress.

“Many financial institutions, including Island Savings, will help put a free financial plan together, which can make a real difference in preparing for the future,” says Knutson. “People often associate wealth with high income. This is not true. Growing wealth comes from developing and sticking to a financial plan. It takes discipline, but knowledge and planning are the best remedies for preventing financial stress.”

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