Older parents, younger children: Living in the sandwich generation

Many people are having children later in life. A new baby can have much bigger financial implications if you're in your late 30s or 40s.

If you're starting a family at a later age, you have less time before you reach retirement. The good news is that you're likely to be more established in your career with more disposable income.

Insurance for starting a family

Be sure your family is protected from any disruptions to your income, starting with life insurance. Your policy may not be enough. The right amount of coverage varies from one family to the next, but in general, a life insurance policy should cover several years of your salary, plus enough to pay off all debts (including a mortgage) and cover some child care expenses (including college).

Find out how much additional life insurance you might need.

A life insurance policy should cover several years of your salary, plus enough to pay off all debts.

Also consider having some kind of disability income insurance, along with long-term care insurance for when you get older.

Many jobs offer these policies as a part of their benefits package. The decision to enroll should be automatic.

If you're self-employed, the stakes are even greater.

Regarding long-term care, it's possible that your greatest healthcare needs and expenses could come before your kids are in the workforce.

Have an estate plan in place

Next, make sure you've got a clear estate plan in place. This means a will that stipulates guardians for your children and how your assets are to be distributed if something happens to you.

Since your children may be too young to take over your assets directly, you should consider setting up a trust in their name. Be sure to designate a responsible person—which may be a different person than their guardian—to oversee the trust until they come of age.

If you can't take care of your kids because of an illness or accident, you'll need to identify the person who can serve as their guardian.

Save money for retirement

Perhaps the biggest challenge with having children later in life is saving money for two big goals—their college and your retirement—at the same time.

There are no universally applicable guidelines. In general, you should make your retirement savings the number-one priority. Remember, you can borrow for college but not for retirement.

Saving for retirement can be done through your employer plan, IRA contributions and other investments.

Save for college

One college savings option is a 529 plan, which lets you save for a family member's education. Any earnings can grow tax free while many states also let residents deduct their contributions against income, giving them a break on their state tax bill.

It's worth noting that this need not be an either/or decision—many parents opt to max out their retirement contribution first, then save whatever else they can through a 529 college savings plan.

The big picture

With deliberate planning, clear priorities, and some help from TIAA, you can take care of your children financially while making sure you have a sound plan to take care of yourself and your spouse.

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This material is for informational or educational purposes only and does not constitute fiduciary investment advice under ERISA, a securities recommendation under all securities laws, or an insurance product recommendation under state insurance laws or regulations. This material does not take into account any specific objectives or circumstances of any particular investor, or suggest any specific course of action. Investment decisions should be made based on the investor’s own objectives and circumstances