How to Save for Retirement While Caring for Kids and Parents

As a member of the sandwich generation, you’re not only raising your children, you’re also caring for your aging parents. The financial burden, not to mention the daily responsibilities, can leave you struggling to invest in your own financial future. Here are some ways you can still save for your retirement while caring for those who depend on you. (See also: 5 Money Strategies for the Sandwich Generation)

1. Make your financial future a priority

Your financial future matters as much as the current responsibilities you have. Consider the stress you experience as you try to navigate life while being a parent and caring for your own aging parents. Do you want to repeat the cycle of stress by failing to plan for your retirement? No, of course you don’t. However, by letting guilt and the needs of the moment dictate your financial choices, you may end up in that place. (See also: 6 Financial Steps to Take When Your Aging Parents Move In)

When you’re juggling medical bills and child care costs, retirement may seem far away and unimportant. It isn’t. You deserve to have your financial needs met in the future as much as your children and parents deserve to have good care now.

2. Take advantage of employer programs

If your employer offers any sort of matching contribution to your 401(k), take full advantage of that opportunity.

As you’re able, increase the amount of money you’re putting into your 401(k) from each paycheck. Having it automatically deducted — which is how most employers handle contributions — will keep you from depending on these savings for your daily expenses. Your goal is to bring your savings amount to the point of maximum matching contributions from your employer. It’s an easy win, as those matching contributions double your savings.

3. Take advantage of tax-free savings

If you don’t have a 401(k), now is the time to set up a traditional IRA. It’s another way to maximize your retirement savings, as a traditional IRA will generally allow you to defer taxes on the money you save until much later — when you start withdrawing it. Deferring taxes enables you to save more now, while you’re living in the sandwich generation budget crunch.

4. Find and apply for available tax benefits

Some additional tax breaks exist for adult children who are providing full-time care for their aging parents. Talk to your CPA about the requirements for claiming your elderly parents as a dependent.

Additionally, examine your options for claiming tax deductions for medical care and other dependent expenses such as transportation, food, and supplies. Not all costs will qualify for tax deductions, but those that do can save you a good chunk of money that can go straight into your retirement savings.

5. Liquidate the assets your parents no longer need

It can be difficult to work through big financial decisions with your aging parents, but doing so can help you both navigate the somewhat rough financial waters of elder care. (See also: 6 Things You’ll Encounter When Taking Over a Loved One’s Finances)

Identify the assets that are used very little but require ongoing maintenance, such as a house that’s not lived in, or a boat or car that sits unused. These unused assets are financial drains. Work together to come up with a plan for liquidating them. Then put the money gained from their sale into an account that pays for your parents’ monthly expenses. This relieves the financial burden you’re carrying so that less of your income is required for your parents, and more of your income can go to your retirement savings.

6. Reduce a big, ongoing expense

The goal here isn’t to come up with a one-time win, but to find a monthly cost that eats up your income and find a way to reduce it. Then you’ll take that difference and add it to your monthly savings.

Make a list of your monthly expenses, rank them from most to least expensive, and start going down the list with your goal in mind. You can shop for better insurance rates and a cheaper cellphone plan. You can sell the expensive car you’re still making payments on, buy a cheaper one outright, and put the amount you used to spend on a car payment directly into your savings. The key is to make sure that the amount you save goes into savings; don’t let it get absorbed into your budget and spent on other things.

7. Take a money challenge

A money challenge is a fun but temporary way to reduce your costs and increase your savings by cutting an expense for a short amount of time. It’s doable because it’s temporary, which also makes it fun. You might not want to haggle over expenses or shop from thrift stores all the time; however, you can do it for a month or so and use what you save to add to your retirement.

8. Invest in a hobby that makes money

Taking on yet another responsibility may seem impossible. However, prioritizing your own interests — in this case, one that can make you some money — is a good idea. You need time to dedicate to your own interests in this time of intense caregiving. If you put time into developing a hobby that has income potential, you’ll be able to add to your retirement fund.

If finding the time is an issue (and of course it is!), don’t be shy about asking family members and friends to pitch in on child care and parent care. You may handle most of the responsibility for your aging parents, but you don’t have to do everything yourself. Set up a schedule so that adult siblings, cousins, and community members take on caregiving for a day or afternoon out of the week. Use that time to work on your side hustle, and funnel the money you make from it straight into your retirement savings.