You are neither too young, nor too old. Your children’s higher education is just a few years away. Your old parents increasingly need support, not just medical and emotional but sometimes financial. Plus, you are either repaying a loan or two, and trying to save something for your own retirement which, in this era, may happen much before you hit 60.
As overwhelming as this sounds, it is a classic sandwich generation squeeze. The phrase ‘sandwich generation’ is often used to describe a growing demographic group that needs to take care of both young children and elderly parents. Not just financially, but emotionally and psychologically too. And increasingly, this is becoming the default state for a large chunk of India’s middle-aged group.
Sadly, most advice on handling this phase of life is either too vague or too guilt driven (e.g. ‘family-comes-first’). Here is one way to think about it. Not perfect, but one which tries to make this intense phase a little less exhausting.
Label the non-negotiables
First, identify the non-negotiables, and then protect them at all costs. I often tell clients that no one gets a loan for retirement. And it is best after your retirement not to rely on children and become an irritating line in their expense tracker; another way of saying ‘your children shouldn’t be your retirement plan’.
The suggested strategy is to continue at least the minimum baseline contribution towards your retirement at all times. This includes provident fund, National Pension System and mutual fund systematic invest ment plans (SIPs).
It is tempting to pause retirement SIPs when other goals shout louder. But once you stop for several years, the compounding lost is very hard to recover. Saving for retirement should be like a noiseless, efficient machine running constantly in background—like a refrigerator.
Maintain a basic emergency fund to take care of 6-12 months of household expenses. It should be large enough to absorb both in come shocks (like temporary job loss) and expense shocks (unplanned, uninsured, unexpected expenses). Ensure that the family, including ageing parents, has adequate health insurance with reasonable top-ups. For some households, a dedicated medical contingency fund may be necessary (if elders’ health can’t be insured). Also, get yourself a large term life insurance.
Be reasonable on higher studies
Indian parents are known for sacrifices. But for middle-aged people who are already overwhelmed, the aim should be to save a meaningful share—not necessarily 100%— for their children’s higher education. Aiming for a reasonable contribution combined with education loans is more sustainable than try ing to entirely fund your child’s higher studies journey at the cost of goals like retirement.
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This doesn’t sound great to hear as a parent, but when financial resources are limited, uncomfortable adjustments may be necessary.
At the same time, don’t take this as an excuse to not sacrifice for your child’s future. Children’s higher education is definitely right up there in importance as retirement. So if cutting down unnecessary habits/expenses and working hard (to earn more) can help save more for child’s future, then you should do it.
Supporting elders
Have no doubts: your parents are your responsibility. You should do what is right and what needs to be done, just as they did when you were young. But if your parents already have their own savings, investments, pensions, and rental income, then trying to do everything on your own isn’t very prudent, even if it’s generous and feels right duty-wise as a child.
There is no right formula about this, but do what is right and what helps you balance other priorities. That said, it is extremely important to ensure that elders have proper health insurance, which, if possible, is augmented with a dedicated medical contingency fund.
Sequencing so it gets better later
If you really are running a tight ship and can’t save simultaneously for everything, then pretending otherwise would mean none of the goal (or buckets) get funded adequately. A better approach might be to sequence things a bit. Money can then flow through goals in a fixed order of importance and lower priority goals get funded only when higher priority ones are getting at least minimum level of funding.
A possible sequence can be emergency fund, health insurances, minimum retirement contributions, essential parental support, and children’s education funding.
Luckily, the squeeze phase discussed doesn’t last forever. Kids grow up, loans get paid off and people enter peak earning years as they move towards their 50s. And given the increase in surplus during this phase, many people can accelerate retirement contributions meaningfully by redirecting money that was earlier going towards col lege fees or loan repayments.
Spending is okay
All this can feel overwhelming. And when responsibilities are too many and money is limited, it is easy to start treating every rupee as a problem to be solved. But life cannot only be about solving problems and discharging responsibilities, as Elon Musk once said.
So go on and take that family trip, celebrate small occasions, spend on experiences that create memories without constantly calculating the opportunity cost. Don’t try to save it all. Occasional guilt-free spending on what genuinely matters isn’t irresponsibility, it is what keeps this long journey worth continuing.
The Author is Founder, Stableinvestor
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