‘Sandwich generation’ perks and pitfalls

I’ve always had ambivalent feelings about the expression “sandwich generation,” which was in the news again last week when BMO Nesbitt Burns put out its latest “retirement readiness” study.

The headline number was that those caught between child-rearing and elder care will be short more than half a million dollars for their own retirement. Defining this generation as those between the ages of 45 and 64, it said this cohort believes they need $818,000 on average for retirement but to date most have saved on average just $258,000.

Why my ambivalence? On the plus side, the sandwich generation always makes for good copy. In fact, the never-published fifth issue of the old Wealthy Boomer magazine I used to be associated with featured just such an anguished baby boomer couple on the cover, complete with squalling kids and ailing parents.

On the other hand, I can’t help thinking “Hasn’t every generation” been a sandwich generation? Didn’t the parents of the baby boomers have to raise us and worry also about their aging parents? And didn’t their grandparents go through the same thing, and so on throughout all recorded time?

Ah but we baby boomers are special, aren’t we? Everything we touch becomes a trend and any asset class we embrace soon becomes overheated; housing in the 1980s, tech stocks in 2000. Soon, perhaps, a rush for vacation properties and retirement homes.

I accept the argument that the boomers have been blessed by extended longevity and generally robust health and new medical breakthroughs. Even so, I don’t see why an extra 10 years of life expectancy makes the current crop of sandwichees more special than previous generations. Arguably, the previous generation married earlier than the boomers. I’d even make the case that the boomers generally married and started forming families roughly 10 years later than their parents did; say on average at age 29 instead of 19. Let’s also assume that we have 10 years more life expectancy. Seems almost a wash, except that we have kids when we’re older. The old folks will pass away at their appointed time, regardless of when we decide to start replacing them with their grandchildren.

I’m particularly fond of a photograph of my own father taken with our daughter as a youngster. Dad was probably in his mid-80s at the time (he’d be 100 this year had he lived that long) and my daughter was maybe 3-years-old. I couldn’t find that photo but I have this similar one showing my late father-in-law and mother-in-law, holding my daughter and one of her two cousins, taken about 20 years ago. Literally, “grandchildren on your knee,” as per the line from the Beatles’ “When I’m 64.”

The young girls are now young women. The point is that period was a fleeting one and so too was the period of being “sandwiched.”

This phase too will pass

Kids soon grow up and parents die; all four of our precious elders in our own case. Because we delayed things like so many boomers did, the grandparents weren’t around to see things like college graduation or marriage for their grandchildren. But with their passing comes inheritances (often), which in turn can help pay for the kids’ university educations. The one “problem” (elder care) eventually resolves itself and helps fix the other sandwich “problem” of the cost of university.

I’ve always loved Emerson’s essay, Compensation. If you’re still a boomer sandwiched between the generations, count your blessings and read it. Here’s a passage I underlined long ago: “For every thing you have missed, you have gained something else; and for every thing you gain, you lose something.”

On the bright side

To those still sandwiched, I’d say enjoy this brief time where you bridge three generations. Soon it will be gone and you’ll have plenty of time to pad your retirement savings, especially with extended life expectancy. Take it from me: working a few extra years is no tragedy. Emerson might even view it as a blessing.

Jonathan Chevreau is the editor-at-large of MoneySense. He blogs here and at findependenceday.com. Find him on Twitter @jonchevreau.

About Jonathan Chevreau

As MoneySense’s Investing-Editor-at-Large, he is also author of Findependence Day and co-author of Victory Lap Retirement. Reach him at [email protected], where he is the founder of Financial Independence Hub.

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