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Are the sandwich generation in a pickle?

Some people are sandwiched in the middle of family lines, providing for both children and parents. What financial pressures do they face, and what are the advice needs of this sandwich generation?

During a recent conversation with work colleagues, we chatted about the various coined names for different generations. From generation X, Y and Z to millennials, centennials and baby boomers... the list goes as far back as the 1940s for what was then referred to as the silent generation.

The majority in our group chat had never heard of the ‘sandwich generation’, but the reality is that unlike the list above which is dependent on your date of birth, many of us will spend time in the sandwich generation regardless of when we were born.

The sandwich generation refers to those stuck in the middle of their family line, typically looking after their children while also caring for older parents and, in some cases, grandparents.

This demographic can often feel like the jam in the sandwich, ensuring their children are financially secure – whether that’s providing for their education or contributing to holidays, weddings and house deposits. In addition, they may be the main carer for an older parent or supporting their parents with home and healthcare finances.

Looking after my children and parents is rewarding and family relationships have been strengthened across three generations

So are the ‘sandwichers’ in a bit of a pickle? According to Emer O’Neill, a Zurich employee, it is a challenge trying to balance it all. “As a fully-fledged member of this demographic cohort, I find much to relate to,” she says.

“Don’t get me wrong”, she adds, “there are many positives for this multi-generational approach to family life. Looking after my children and parents is rewarding and family relationships have been strengthened across three generations. The challenge is knowing that there are savings available to tap into at any given time – be that for children or for my parents. It’s also important that I keep contributing to my own pension pot so that I can have the finances I need in retirement.”

Over half of carers in Ireland (52.7 per cent) were between the ages of 40 and 59, with the age group 50-54 accounting for almost 15 per cent of all carers, according to the CSO. Given the increases in life expectancy, we can expect that number to rise as multi-generation families expand. This could mean that ageing parents will need both physical and financial support for longer.

Other contributing factors for the rise in the sandwich generation is that more women are having children later in life, and parents are supporting their children financially for longer too.

The cost of education in Ireland continues to rise and parents are feeling the financial burden of getting their children through primary, secondary and third level education. Zurich's 2019 Cost of Education Survey also found that 88 per cent of parents provide financial support to their college-going children and are being bankrolled to the tune of almost €2,000 a year for this alone.

In addition, the rising costs of rent, and indeed the difficulties for younger people to get on the property ladder in Ireland, are also factors that keep children at home for longer.

Planning for the future

Considering that the needs of the immediate and extended family can change a lot over time, early financial planning is important to ensure security when supporting young and older family members.

Kristen Foran, national sales director of Zurich, agrees that developing an early savings habit, and planning a retirement strategy well in advance, is key.

According to Foran, the key to a successful financial strategy is combining savings and retirement planning, and starting this process as soon as possible. “Financial planning and investment advice in Ireland is undergoing a change,” she says. “No longer is it advice on a one-off product choice, it has become much more complex and involves process planning for the various different stages of a person’s life, both before, leading up to and eventually into retirement.”

It's never too early to start saving and planning for retirement

Understanding the different life stages and experiences that an average Irish family can go through these days is really important. Given the complexities involved in financial planning, it is a good idea to talk to a financial advisor to begin savings and retirement planning and review the plan regularly to ensure that all your financial needs are being met.

“It’s never too early to start saving and planning for retirement,” Foran says. “Each stage of life brings different challenges and opportunities. As life changes it’s important to reassess and to tweak your strategy to suit your changing lifestyle. That is why there is a continuing need for professional advice.”

In today’s world, family life and generational ties are fluid and it makes sense that your wealth management strategy is flexible enough to react to any changing dynamics, either today or in the future.

It's important to plan for the future. The choices you make now could make a real difference. Starting a pension is a smart decision. At Zurich we are here to help you every step of the way. Speak to a financial advisor or contact Zurich directly to find out how you can be Future Ready.

Zurich Life Assurance plc is regulated by the Central Bank of Ireland.