Caught in the Gen X Sandwich: How to Juggle Caring for Parents, Kids, and Your Retirement

For Gen Xers, who are now between 44 and 59 years old, life can feel like a balancing act. Many are juggling the care of both aging parents and their own children – whether it’s young kids or adult children still relying on them.

A recent survey found a large percentage (20%) of this group is involved in caregiving for parents or family members, and while some say it strengthens family bonds, others (37%) report the financial strain it causes.

With all these pressures, it's no wonder that over half of Gen Xers (54%) believe they need help from a financial professional to reach their retirement goals.

Thankfully, there are steps you can take to keep all the balls in the air and your financial stress levels grounded as you navigate this challenging phase.

What Gen Xers Should Do to Stay on Track for Retirement

1. Prioritize Your Own Retirement Savings

It’s tempting to focus all your energy on caring for loved ones, but your retirement savings should remain a top priority. Remember, your kids can borrow for college or support themselves eventually, but you can’t borrow for retirement.

If you aren’t already contributing to your 401(k) or an IRA, now’s the time to start. Take advantage of catch-up contributions, which allow those 50 and older to save more in tax-advantaged accounts.

This will give your retirement nest egg a needed boost.

2. Consider Managing College Costs with a 529 Plan

For those still supporting kids through college, a 529 plan can be an effective tool. These plans offer tax advantages when saving for education, allowing your money to grow tax-free as long as it's used for qualified education expenses.

If you're concerned about over-saving, recent changes now allow unused funds from a 529 plan to be rolled over into a Roth IRA under certain conditions. This new flexibility means that if your child doesn’t need all the funds, you can still put that money to work for their future retirement without penalties.

Learn more about ways to save for college – and their impact on financial aid – by downloading our free guide: Saving for College: Financial Tools to Help Secure Your Student’s Future.

3. Have a Plan for Long-Term Care

Caring for aging parents can give you a front-row seat to the potential costs of long-term care. With the average cost of a private room in a nursing home now exceeding $100,000 annually, planning ahead for your own future needs is crucial.

The earlier you start planning, the more options you’ll have to reduce the potential financial burden on yourself and your children. For information on ways to cover the costs of long-term care, read our guide, Options for Funding Long-Term Care Expenses.

4. Discuss Financial Expectations with Family

The pressure of providing financial support for both parents and children can be overwhelming. It’s important to have open conversations with your family about expectations.

Talk to your parents about their financial situation, whether they have savings, long-term care insurance or if they’ll need your financial assistance.

Similarly, have honest conversations with your children about your ability to help them through college or with other expenses. Establishing clear boundaries and expectations can reduce stress for everyone.

5. Create a Comprehensive Financial Plan

With so many competing financial demands, a well-thought-out financial plan is essential. This plan should include your current savings, expected retirement income and strategies for covering your children’s education costs and your parents’ care if needed.

A financial adviser can help you prioritize goals and identify gaps in your current strategy. They can also provide insight into claiming Social Security benefits, managing tax efficiency and creating a sustainable withdrawal plan once you retire.

6. Build an Emergency Fund

An emergency fund becomes more important when you’re balancing care for multiple generations. Having three to six months’ worth of expenses in a liquid savings account will give you a safety net when unexpected costs arise – whether it’s for a medical emergency, home repair or financial support for a family member.

This buffer can help prevent you from dipping into your retirement savings to cover unplanned expenses.

7. Maximize Employer Benefits

Many Gen Xers are still in the workforce, and employer benefits can play a crucial role in easing financial strain. If your company offers benefits like flexible spending accounts (FSAs), dependent care accounts or paid leave for caregiving, take full advantage.

Also, look into any employer-sponsored health savings accounts (HSAs), which provide triple tax benefits and can be used for qualified medical expenses, including caregiving for aging parents.

These tools can help you save for current and future healthcare costs while reducing your taxable income.

8. Take Care of Yourself, Too

Amidst all the caregiving, don’t forget about your own well-being. Stress can take a toll not only on your mental and physical health but also on your ability to manage finances effectively.

Consider working with a therapist or counselor to navigate these pressures, and set aside time for activities that recharge you. Being proactive about your health today can reduce healthcare costs down the road and ensure you have the energy to stay on top of your financial goals.

Bottom Line

Balancing caregiving responsibilities while managing your own retirement savings can feel overwhelming, but it’s possible to stay on track with the right planning. Prioritize your own financial future, take advantage of resources available to you and don’t be afraid to ask for help.

With careful attention to your goals and a solid financial plan, you can achieve a retirement that provides both peace of mind and financial stability.

Need help balancing it all? A financial adviser can help you create a financial plan to care for your family – and your future. Schedule a consultation today!