FINANCIAL NEEDS OF THE SANDWICH GENERATION
· Today’s generation tends to think differently from the traditional approach in financial planning.
· The new, wealthy sandwich generation respects its parents who helped them into a new world of prosperity that they were denied themselves.
· However, this generation considers it a sacrilege to expect anything from its own children.
· Therefore, it tends to look beyond buying a term insurance, investing in equity funds using SIPs, insuring for health, and allocation of a small portion to alternate assets.
1. Retirement planning
· Investors of the new generation expect to be responsible for themselves, and not depend on their kids in any manner.
· They also believe that they have worked hard to get where they are.
· They would like to use the time after retirement to travel, bond, indulge and live in comfort.
· Retirement for them is about doing something different, useful and fulfilling for as long as they can.
· They seek wealth management strategies to preserve, protect and grow their wealth from a position of adequacy rather than shortage.
2. Health planning
· Their attitude to health is also different, as they are obsessively focused on good health.
· They have a lifestyle that includes eating healthy food and exercising regularly.
· They would want their medical care to be financed from their own funds, and will also seek hired help if they require any nursing.
· So, instead of an adequate health insurance, they prefer the idea of a health corpus.
· They want this amount invested in a professionally managed trust, which can provide funds if and when they need hospitalization and medical care.
· They would also willingly stop their medical care if the corpus runs out.
· If they do not use their health corpus, they will pass it on as a bequest to their children.
3. Parenting & child care
· They want to give their children quality education and freedom to choose the career of their choice.
· They do not compel them to find a job too soon, live with them, or pursue their profession after them.
· They want their children to be able to pursue their higher studies for as long as they like, even if something were to happen to the parents.
· Their education funding solution is totally different as they ignore education loans, and tax benefits, which will bind their children to the insurers for payments and repayments.
· Instead, they prefer professional trustees to pay the fees and fund the educational needs without interruption.
4. Money view
· The sandwich generation investors also view money differently.
· They grew up in an age when being wealthy was considered a crime.
· So, they are not apologetic about their earnings or assets and like inclusive wealth-generation models.
· They prefer the power of earning what they are worth, creating wealth through innovation, and enjoying the freedom of allocating it the way they want.
· They also like to give money in charity and to the less privileged.
· They dislike creating spurious charitable trusts, or multiple and complex cross-holdings.
· Nor do they like NGOs where money is mostly spent by favoured managers and trustees.
· They do not believe in leaving behind houses that their children may never visit or use.
· They are also not inclined to bequeath wealth that may turn the kids into less responsible adults.
· Instead, they want transparent and efficient structures for their chosen beneficiaries, who may include the children of their household staff too.
· Therefore, they seek institutional structures with solid administrators, trust companies, wealth and family office managers and similar professionals.
· They like solid processes, documentation, transparency, information disclosures and structures that induce trust and faith.
· Paying a fee to get these structures and service providers is not a problem to them.