Tuesday, 15th March 2016
If you're being squeezed between the financial needs of your children and ageing parents, you're in what's commonly known as the Sandwich Generation. It's an awkward place to be - most likely you're still working, but your money isn't going far. You've got university fees to pay and for the past couple of years, you've been helping your parents with their living costs.
There's the mortgage to think about and every day expenses, so your retirement planning isn't getting a look in. While you may be conscious that one day soon, you'd like to say goodbye to the 9-5 and travel to some distant horizon, there's never time to put any real thought to the situation.
It's time to ask yourself what you'd do if things didn't change - if the young adult in your life decides to do another degree and needs more help with the fees? Or if your parents need more extensive care than what anyone has budgeted for… Where will the money come from?
Bricks and mortar solution for Sandwich Generation
Investing in a property is a fantastic way to help with your financial predicament. If you've still got 10 years left in the workforce, it's more than enough time to build a diversified portfolio and an income stream that will see you through retirement. While you're still working, you'll have all the tax advantages applicable to investors, plus the added bonus of a tax variation and depreciation.
Deposit strategies for residential investments
More than likely, at your age you'll have enough equity in your home to fund the deposit on a rental property. After a couple of years, equity in this first investment will go towards the second and so on. There are also options to use some of your retirement savings when purchasing through a Self Managed Superannuation Fund.
When you have adult children living at home
If they're not already paying rent, it's time they started. You can either put this into your own mortgage or place it in a high interest bearing account. When they're ready to move out, you could transfer the savings to help pay for a deposit on their own place.
Invest to rent - to your own children
If you buy a residential investment and your child lives there with a legal tenancy agreement - and pays rent - you'll enjoy all the benefits of a regular rental. A two bedroom apartment could be the ideal solution - your child lives in one room and a uni mate in the other.
No need to be the meat in the Sandwich
With planning, you can take back control of the situation. Talk to property portfolio specialist such as myself and find out your numbers and we'll work out a budget. We'll help you get to that far horizon and look after everybody else along the way.
Are you part of the Sandwich Generation? What strategies have you used to keep your finances on track?
Until next time,