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Baby boomers: the new Sandwich Generation
Retiring baby boomers are effectively 'sandwiched' between two sets of dependants: their elderly parents on the one hand, and their children on the other, according to Equity Trustees head of wealth management Phil Galagher.
As a result, the generation entering retirement now may end up being known as the new "Sandwich Generation", according to Galagher. The term was first used in the 1980s, and referred to couples in their 40s and 50s.
But with their parents living longer and their 20-30 year-old children undertaking tertiary study or living at home, baby boomers are faced with the prospect of two sets of dependants as they enter retirement, said Galagher.
"These issues are a relatively new phenomenon, but increasingly need to be taken into account in retirement planning," he said.
Retirees may be trapped into staying in their family homes, preventing them from downsizing and potentially releasing the equity from their first home, Galagher added.
The best way to deal with the impending 'sandwich' effect may be for baby boomers to involve their children in the planning process early on, he said.
"While planning is always the key, early communication and discussion plays a major role so that all family members can understand the others' point of view and desires," Galagher said.
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