3rd Quarter 2017

Solutions for the Sandwich Generation

It's hard enough to juggle saving for your own retirement while you're supporting your kids. But it becomes even more difficult if you're also helping your aging parents. The following tips can help you stretch your money if you're in the sandwich generation:

Take advantage of tax breaks for raising kids. If you and your spouse work, you may be eligible for the dependent-care credit if you pay for daycare, preschool, a babysitter, before- and after-school care, or even day camp for children under age 13 while you work. The credit is worth up to $1,050 for one child or $2,100 for two or more children, depending on your income. There is no maximum income cutoff.

Tax breaks for helping your dependent parents. You may qualify for that same tax break if you're supporting elderly parents who aren't physically or mentally able to care for themselves, and you pay for care for them while you work. For more information, see IRS Publication 503, Child and Dependent Care Expenses at

Tax-advantaged college savings. If you're saving for college for your kids, make the most of a 529 college-savings plan. Money saved in these accounts grows tax-deferred and can be used tax-free for college costs. Depending on your state, you may also get a tax break for contributions. See for details.

Talk with your parents about their finances. If your parents are healthy enough now, they may want to consider long-term care insurance, which can help cover the crushing costs of care in a nursing home, an assisted-living facility, or in their own home. See for more information. It's also important to figure out how you'd pay for potential long-term care costs for yourself in the future — see to find out more about factoring these costs into your financial plans.

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