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Dream Again

Sandwiched: What to do when everyone depends on you

If you're taking care of children as well as aging parents, you're likely feeling the pinch. Here's a perspective that could help you look after those you love and still keep retirement goals on track.

Raising a child or caring for an elderly or ill parent is hard enough on its own, but more than one in eight Americans between the ages of 40 and 60 are doing both, according to the Pew Research Center.[1] And some 78 percent of those polled who are in the so-called sandwich generation worry about having enough money to retire comfortably, according to a September 2010 survey from Generation Mortgage Company and Zogby International.[2]

Sandra Beckwith of Fairport, N.Y., feels their pain. The book marketing consultant has two daughters now living on their own and an 83-year-old mother who lives two hours away. Her mother was recently diagnosed with congestive heart failure and may need to move in with her. "It's a roller coaster," Beckwith says of her mother's health. "There's an episode and then things stabilize. It's a stressful situation, partly because there are so many unknowns."

So how can you care for parents and children while keeping your own finances secure? Here are some tips:

Seek professional financial help.

Ask your financial professional if you're eligible for dependent tax credits or deductions. If a parent lives with you and requires care, you may be able to claim your parent as a dependent and use the credit for child- and dependent-care expenses.[3] Those might include medical bills or modifications you made to your home to accommodate a parent with a disability.

» Don't have a financial professional to talk with? We can help you find one.

Maintain some liquidity.

It's very important to continue contributing to your own retirement and savings accounts, but you may want to consider setting some money aside (or adding additional money to your emergency fund) in case you need to take time off from work or cover unanticipated medical costs. Caregivers to those over age 50 spent an average of $5,531 out of pocket to help their family member in 2007, according to the AARP Public Policy Institute.[4]

Missing work time is a major concern for the self-employed Beckwith, who plans on working evenings and weekends when she's not caring for her mother or driving to medical appointments. Eligible employees may be able to leave work temporarily to provide full-time care for a critically ill family member, thanks to the Family and Medical Leave Act[5] (FMLA).

Look at life insurance.

If your parents are healthy enough to qualify for a life insurance policy, you might encourage them to buy one with a long-term-care feature or pay for such a policy yourself, says Jeffrey Cullen, managing director — Chicago at 401(k) Advisors Inc. An accelerated death benefit rider on the policy may allow the policyholder to use a portion of the death benefit to cover costs associated with long-term care.

Start planning.

Planning can help you feel less squeezed.

Use our interactive retirement planning tool to keep tabs on your financial goals and to help measure and track your progress along the way.


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Jeffrey Cullen, and 401(k) Advisors Inc. are not affiliated with any company of the Principal Financial Group

Insurance products and plan administrative services are provided by Principal Life Insurance Company. Securities are offered through Princor Financial Services Corporation, 1-800-547-7754, member SIPC and/or independent broker dealers. Securities sold by a Princor® Registered Representative are offered through Princor. Princor and Principal Life are members of the Principal Financial Group® (The Principal®), Des Moines, IA 50392.


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