Boomer Sandwich

Posted by: Gene M. | Dec 26,2007


It sounds delicious, but a Boomer sandwich is actually a financial problem.  Research shows that Baby Boomers are caught in the middle between their children and their parents.  Though the Baby Boomer generation is considered the most well-off generation in history.  At the same time, Boomers have been shown to be fairly short-sighted when it comes to financial planning for the future.  So while they may have fair savings in the present, this cache may not stretch very far into the future post-retirement.  

When you couple this with the issue that Boomers are often financially responsible for both parents and children, these savings are going to be stretched even further.   Even if your retirement savings are adequate, you’ve still got to factor in how much money will be going out for financial support.  Often, Boomers only look at their immediate financial picture: mortgage, loans, credit card debt, vacations, etc.  Even if they factor in emergency expenses, possibly for a medical emergency, this does not take into account expenses for other family members.  What about a medical emergency for someone else in the family?  What about a son or a daughter who needs help paying the mortgage?  

It’s difficult paying off one mortgage, let alone two.  This scenario will affect some Boomers more than others.  Boomers with many children will obviously face a bigger burden.  Even if the adult children are financially responsible, most grandparents want to help with their grandchildren’s future.  This may come in the form of a college fund or basic savings account.  If you have an adult child who’s consistently shown to fall into financial dire straits, then this should definitely factor into your plans.  

Some retirees may cut off their children once they hit retirement.  I’d say this is easier said than done, as when a child – however old – comes looking for help, it’s difficult to say no.  Whatever the individual case, this extra expense should be factored into all retirement savings plans, because even if there’s not a problem today, you may need to give financial help down the line.  

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