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The term “sandwich generation” commonly refers to those people who are caring for aging parents and their children at the same time. Today, I introduce a new term – The Financial Sandwich Generation.

My parents were children of the Great Depression and, like many people of that era, they were and are careful with money. While extraordinarily generous to their children, grandchildren and to their beloved charitable causes, spending money on a luxury just for themselves still requires breaking decades of money muscle memory. Surveys during the 1960s showed that people who were young during the Great Depression were not only, like my parents, extremely careful with money but also quite risk averse. Not surprisingly, this aversion to risk made this generation much less likely to invest in the stock market.

Enjoy this month’s edition that features an update on the T. Rowe Price Real Estate fund and reminder about the upcoming tax filing deadline.

During my regular morning Starbucks visit recently I overheard a conversation between two mothers doing what us parents do – brag about the advanced intellect of their children. In this case, 3-year old “Billy” was off all the charts at pre-school and obviously on the fast track to a Harvard full-ride. I, of course, was intrigued and just had to see what toddler budding brilliance looked like so I inconspicuously glanced over….just in time to see “Billy” lick the display glass in front of the pastries. Maybe Billy’s parents would be wise to invest for his future just in case his genius doesn’t reveal itself to those outside his immediate family.

I have a fond memory of my maternal Grandfather sitting me down before I graduated from college and telling me, “Steve, whatever you do, don’t borrow money.” While Grandpa John lived far from an easy life as a dairy farmer in Nebraska, there was no mortgage on the farm when he inherited it after his father died. Circumstances now, however, are just different and heading into retirement with a mortgage might be perfectly reasonable. Quick rule of thumb: Compare the interest rate on your mortgage with your projected investment returns and allocate your dollars to the higher number.

Last week I wrote about how insurance companies often represent themselves as “financial advisors” while they attempt to sell you complicated insurance contracts called annuities. But they aren’t the only ones hawking these fee-laden products. If your employer’s workplace retirement plan uses TIAA, (like UK, Transy, EKU, etc.) chances are you’re invested in an annuity – even if you didn’t realize you chose it. Why do the firms that sell annuities like them? The money they reap in fees.  

First, what is an annuity? While there are many complicated varieties, the simplest is when you pay a lump sum amount and purchase an insurance contract – called an annuity – that promises to pay you a certain amount for the rest of your life. It sounds great because those of us without a pension have to save, invest and then figure out how to take income from those investments all through our retirement – and that can be tricky. Voila! A perfect solution, right? Well, remember the expression, “If it seems too good to be true, it probably is.”

About once every two weeks or so, on average, my wife will receive a mailer inviting her to a free steak dinner – apparently vegetarians aren’t good prospects – that promises to reveal the secret of not running out of money in her golden years. I used to receive the same ones when I worked at UK, so I assume that’s the list she’s on. As I scan the invitations I often skim to the bottom of the page where the fine print explains these firms don’t really offer investment, estate or tax advice. What do they sell? Insurance contracts called annuities. They imply they’re offering educational retirement planning workshops, but their real intent is to sell expensive annuities and life insurance policies.

Enjoy this month’s edition that features an important reminder on tax document mailings, an identity theft warning and notice of business continuity plan.

There was a movie released last year called Living Among Us about vampires who, previously living in the condo up the street undetected, now make themselves public so documentarians can learn how they live and coexist with humans. When I read a summary I instantly thought of the book, The Millionaire Next Door. That title, even more than two decades after it was written, still paints such a crisp mental picture, doesn’t it? Seemingly normal people, living among us in a non-gated community, driving their Chevy Oldsmobuick to work every day, mowing their own lawn on Saturday, but….behind their cover as normal, they’re actually, shall we say it, FINANCIALLY INDEPENDENT! Oh, the horror!

How should you protect yourself against a market downturn right before or during retirement? This New York Times article recommends several actions, including hiring help - being careful to avoid a salesperson or a broker who call themselves advisors but get paid only when they sell you something – in the form of a Certified Financial Planner professional. Hint: I know one I really like.

It is rare but sometimes I read an article that I think is so spot on it makes more sense to share it than cover the same topic. So, here you go, edited for brevity with a link to the full article at the end.