Crue Invest (Pty) Ltd
Many South Africans reach midlife expecting that they will have greater financial stability, only to find themselves supporting adult children and ageing parents while trying to secure their own future.
There is a stage in life where many people expect to feel more financially settled. The children are older, careers have hopefully gained traction, the home loan may be reducing, and retirement planning is gathering momentum.
Yet for many South Africans, this is precisely the point at which the financial pressure intensifies. Adult children may still need support, ageing parents begin to need assistance, and those in the middle find themselves trying to fund everyone’s future while quietly wondering who will fund their own.
This is the reality of what has become known as the sandwich generation – adults who are financially, emotionally and practically responsible for both their children and their parents.
In South Africa, where extended-family responsibility, economic pressure, longevity, unemployment, and insufficient retirement savings intersect, this phenomenon is not unusual. What makes it particularly difficult is that it is rarely planned for.
It often begins gradually, such as a monthly contribution to a parent’s medical aid, helping an adult child with rent, paying for an extra year of study, or covering shortfalls after a hospital admission. Before long, these once-off acts of support become embedded in the monthly budget.
Love and duty: The emotional side of financial planning
The difficulty is that family support seldom presents itself as a financial planning problem, but rather as love, duty, guilt, compassion, obligation and sometimes even crisis.
Few parents want to see their children struggle, and few adult children can comfortably watch their ageing parents become financially vulnerable. But without structure, these good intentions can place enormous pressure on the person in the middle, often at the expense of their own retirement security.
One of the most dangerous assumptions is that family support is temporary because, in practice, it often continues much longer than expected. Children may study for longer, battle to secure employment, require help purchasing vehicles, deposits, travel, medical aid, insurance or postgraduate qualifications.
Parents, on the other hand, may live longer than anticipated, often with chronic conditions, increasing healthcare costs, or a need for assisted living, frail care or home-based support.
The result is that the middle generation can find itself carrying expenses across three households while trying to preserve its own financial independence.
Our advice is to replace silent sacrifice with honest conversation – which is often the hardest part because money conversations within families can be emotionally loaded.
Older parents may feel embarrassed about their financial position or defensive about past decisions, while adult children may assume their parents can afford to help because they have always done so.
The reality, however, is that avoidance doesn’t make the problem disappear – it merely allows the financial strain to grow.
Where ageing parents are involved, it is important to understand their full financial position, including their income, expenses, medical aid, gap cover, assets, liabilities, policies, retirement income, wills, estate liquidity and living arrangements.
We find that many older people remain in homes that are too large, too costly or too difficult to maintain, often for understandable sentimental reasons.
However, ‘too much home’ can quietly erode retirement capital through rates, maintenance, insurance, security and general upkeep – meaning that downsizing is not merely a property decision, but often a cashflow, safety and lifestyle decision.
Healthcare planning is equally important. As parents age, medical aid choices should be reviewed carefully to ensure that the plan remains appropriate for their needs.
Chronic benefits, oncology benefits, hospital cover, gap cover and day-to-day medical funding all need to be understood. Families should also investigate whether any old policies, hospital cash plans or matured investments still exist, which in our experience is often the case.
Legal planning is another essential part of the conversation. Parents should have updated wills, with an executor who is still alive, contactable and appropriate for the role. Families should know where the original will is kept and whether the estate has sufficient liquidity to pay costs, taxes and expenses.
Where there are second marriages, financially dependent children, family trusts, offshore assets or unequal support between siblings, the estate plan needs even greater care.
Power of attorney
A power of attorney can be useful where a parent is physically unable to attend to certain affairs but still has mental capacity. However, in South Africa, a power of attorney generally falls away when the person who granted it loses mental capacity, which means it is not a solution for dementia or advanced cognitive decline.
Families should therefore have conversations early, while parents are still able to make informed decisions, about how their affairs should be managed if their capacity deteriorates.
In the case of financially dependent adult children, a different type of boundary-setting may be required. Supporting a child through tertiary education or early career instability is often a worthwhile investment, but open-ended support without expectations can become harmful for both generations.
Parents should be clear about what they can afford, for how long, and under what conditions – as there is a significant difference between helping a child launch and unintentionally funding a lifestyle they cannot yet afford.
This is where financial boundaries become an act of love rather than a withdrawal of support.
Helping an adult child draw up a budget, understand taxes, contribute to medical aid, pay insurance, build an emergency fund or take responsibility for debt can be more valuable than simply transferring money each month – with the aim being to move them towards independence, not to create a longer dependency runway.
For those caught in the middle, the most important principle is that your retirement funding cannot be the balancing item in everyone else’s financial plan.
While it may be tempting to reduce your retirement contributions, access discretionary investments, draw from emergency funds or delay your own planning in order to help others, this can perpetuate the very cycle you are trying to break.
If you compromise your own future too severely, you may one day become financially dependent on your children, repeating the pattern into the next generation.
This does not mean refusing to help – it means helping with intention, quantifying the support, building it into the financial plan, stress-testing it, and understanding the trade-offs.
If you are paying a parent’s medical aid, funding a child’s studies, subsidising rent or assisting with living expenses, these amounts should not sit outside your planning as vague acts of generosity. They should be treated as real line items with real consequences.
A multi-generational financial plan can be particularly powerful in these circumstances. It allows the family to look at the bigger picture: who has income, who has capital, who has risk, who needs protection, and where the pressure points lie.
It can also help families make better decisions around housing, retirement income, estate planning, tax, healthcare and wealth transfer. Importantly, it brings structure to conversations that are otherwise driven by emotion.
The sandwich generation carries a heavy load, often quietly and without recognition. But being generous should not mean being financially exposed, and being responsible should not mean being without boundaries.
From experience we know that families function best when support is honest, sustainable and planned.
When families are brave enough to talk honestly about money, they give each generation something far more valuable than financial support alone: they give them clarity, dignity and a better chance of standing on their own.
