NASAA Outreach Initiative:
The Sandwich Generation

Do you find yourself struggling to plan for your retirement while also helping children pay for college education and providing financial assistance to your parents? If so, you are part of the “Sandwich Generation,” the generation of adults responsible for their own needs as well as the care and support of both their dependent children and elderly family members.

Taking on responsibility for the financial security of three generations, the adults caught in the middle may feel squeezed into sacrificing a comfortable retirement for themselves in order to fulfill their obligations to their children and senior parents. NASAA’s Sandwich Generation resources can help you better understand, balance and manage the financial needs of your children, you and your parents.

RESOURCES

Your Children

Your children are watching and learning from you. Have an open dialogue about the importance of financial planning and show them how to investigate before investing. They should understand the relationship between risk and return and should ask themselves: What are my future cash needs? Will this investment allow me to have access to funds to meet future cash needs with significant penalties?

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You

As a member of the Sandwich Generation, you may feel pressured to make quick investment decisions in order to make up for insufficient assets as you near retirement. As a result of this pressure, you may miscalculate the level of risk you need in order to achieve your financial goals. In addition, you may neglect to thoroughly investigate an opportunity before you decide to invest.

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Your Parents

As a member of SandGEN, one of your responsibilities may be to protect your elderly family members and their financial future. A primary concern is making sure your elderly family members are free from investment fraud.

Learn How

Common Investment Schemes

Each year, investors are targeted with a variety of misleading sales tactics, or worse, outright fraud. Investors also have to be wary of unregistered activity. Members of the Sandwich Generation, adults who feel the squeeze of both their children’t educational expenses and their elderly parents’ needs, may be vulnerable to shady tactics. If any of the following has occurred to you, immediately contact your local securities regulator to determine if you should file a complaint.

Learn What to Watch For

Red Flags

Sandwich Generation: Red Flags

Fraud can happen to anyone. Members of the Sandwich Generation, their elderly family members and their children are no different. Watch for red flags when considering an investment opportunity.

Some common phrases used by salespeople to mislead investors:

Guaranteed high returns – no risk! There’s no such thing. The higher the returns, the higher the risk. This type of sales pitch is often aimed at people who live on a fixed income or are near retirement and are worried about not having enough money.

Insider tips – get in now! Scam artists use this tactic to pressure you into making a quick decision. They make the offer more attractive by suggesting they have secret information about a company that the general public doesn’t have. They pressure you to act now to “get in on the ground floor”. This could be particularly tempting for members of SandGEN who are looking to supplement insufficient retirement assets.

Offshore investment – tax free! You can defer paying taxes, but you can’t avoid paying them. This type of deal is often pitched as a secret. By asking you to keep the deal to yourself, promoters of these investments hope to avoid hard questions from family, friends or financial advisers who might see through the scam. Often, your money will be transferred to overseas locations, making it harder to recover and even harder for the authorities to investigate.

Profit like the experts! The promoter convinces you that he or she has access to inside information known only to a select few who are said to be making a lot of money. For example, in a prime bank scheme, investors are told about the existence of a secret market that only the world’s largest banks know about and certain investors are then given an exclusive opportunity to participate in this secret market. The catch is: secret prime bank markets don’t exist.

Great investment opportunity – your friends can’t be wrong! The success of these opportunities relies on the trust you place in your friends and the fear of not keeping up with them financially. For example, “affinity fraud” occurs when salespeople target religious, ethnic, professional or social groups. They work their way into organizations and befriend members in order to sell them fraudulent investment products.

Brochure

For more information, tips and helpful checklists, download a free copy of Sandwich Generation: Caught in the Middle.

Sandwich Generation: Caught in the Middle