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Financial literacy for your clients in their 40s and 50s

As clients enter their 40s and 50s, some may find themselves responsible for the care and financial needs of their aging parents and grown children while balancing their own goals. Known as the sandwich generation, these clients are likely in their peak earning years juggling competing demands for time and money. Showing them how to plan for unexpected expenses and maximize incoming wealth could be important in helping them successfully reach their financial targets for retirement.

The 2025 personal finance index (P-Fin Index) suggests there鈥檚 room to help Gen Xers understand more about finances, especially relating to risk. According to the 2025 personal finance index (P-Fin Index), Gen X correctly answered 51% of the questions gauging financial literacy.¹ There are many opportunities to talk about financial literacy with clients in their 40s and 50s to help them understand the essentials and their options during this busy time of life. 

Financial literacy and financial well-being are related

The 2025 P-Fin Index shows a direct correlation between financial literacy and financial well-being. Specifically, higher financial literacy is generally tied to greater financial well-being. In addition to gauging general financial well-being, the P-Fin Index also measures basic retirement fluency to help gauge financial well-being in retirement. According to 2025 results, retirement fluency among U.S. adults is low. Relative to generations, Gen X respondents answered 38% of retirement-related financial questions correctly¹. Notably, more than half (53%) of all respondents know annuities can provide lifetime income¹, an essential factor in retirement planning. 

To help boost your clients鈥� financial literacy, here are four opportunities to help them understand strategies for managing their finances and preparing for retirement.

1. Education funding and costs

To help clients plan for their children鈥檚 college education, it鈥檚 essential to start conversations early about the costs. According to Sallie Mae鈥檚 鈥淗ow America Pays for College 2025鈥� report, families paid an average of $30,837 for higher education over the 2024-25 academic year, with 48% covering expenses with income and savings.² For clients with younger children, discussing savings options like 529 plans or annuities can help make college more affordable. For clients with kids nearing high school graduation, exploring the FAFSA^庐 (Free Application for Federal Student Aid) can provide access to grants, scholarships and federal financial aid.

There are also people in their 40s and 50s paying off loans they took out for their children鈥檚 education. As of Q2 2024, the outstanding balance on Parent PLUS loans totaled $109.8 billion.³ Gen Xers, who attended college in the 1980s when costs began rising, may still be paying for their own degrees while helping their children pay for college. As the generation with the highest average student loan balance, the average Gen X borrower still owed $44,240 in 2024.⁴ Reviewing budgets and retirement plans for clients in this situation can help them stay on track with their financial goals.

2. Re-evaluate goals based on time horizon

For clients who made financial plans in their 20s and 30s, those initial plans may need revised. A lot can change in 20 years, like promotions and job changes, growing families or being sandwiched between supporting grown children and aging parents. Spending habits often differ from generation to generation, potentially calling for an updated financial plan. Clients in their 40s and 50s may be putting more money toward health care, housing or insurance, for example. It鈥檚 worth revisiting your clients鈥� long- and short-term goals to help them understand how current spending could impact their retirement plans. Periodic reviews can also expose retirement savings shortfalls that can be addressed while there鈥檚 time. With that insight, you can initiate conversations about catch-up contributions and other options that could help close a potential gap.

3. Retirement budgeting and income streams

Members of the sandwich generation, typically those in their 40s and 50s, often face significant financial strain supporting their aging relatives, grown children and themselves. According to a recent 麻豆传媒 survey, 74% of respondents adjusted their retirement plans to accommodate competing financial demands, with changes ranging from delayed retirement to using retirement savings to support family. Early planning with professional guidance can be essential to help address 鈥渟andwiched鈥� clients鈥� retirement concerns.

Over a third of the group also worry they鈥檒l outlive their savings, and 31% are concerned about affordable health care.Your clients are saving money for retirement in 401(k)s, IRAs, annuities or other retirement saving options. They may need help creating a sustainable retirement income strategy that factors in required minimum distributions (RMDs)⁵ and potential tax implications.

Here are a few effective ways to help clients see how their planning could pay off for a confident retirement:

• Make a full chart of a client鈥檚 accounts, from Social Security to drawdowns from managed money accounts, to illustrate how everything they鈥檙e saving for will come together in retirement. 
• Introduce clients to the potential benefits of a Roth IRA, from tax-deferred growth to tax-free qualified withdrawals.
• Talk about how annuities can help meet clients鈥� protected growth goals and provide retirement income. 
   

4. Legacy planning

Clients in their 40s and 50s may be starting to think about their legacies. You can help them learn about end-of-life planning essentials, like the roles beneficiaries, wills and trusts could play in their estate plans. Assigning a power of attorney who can make legal and financial decisions on their behalf is another important step in legacy planning you can help them keep in mind.

Helping clients understand their financial future can help empower them to make informed, lasting decisions. For clients in their 40s and 50s, you can provide tools and have valuable conversations to help them achieve their financial goals and live a remarkable retirement.

Insights on 麻豆传媒 Connect. Tips, tools and resources to grow your business by helping clients retire with confidence.

¹ 鈥淔inancial literacy and retirement fluency in America,鈥� 2025 TIAA Institute-GFLEC Personal Finance Index, accessed 9/8/25. 
² 鈥滺ow America Pays for College 2025 Fact Sheet,鈥� conducted by Ipsos for SallieMae, accessed 9/8/25.
³ Student Loan Debt by Generation, Education Data Initiative, Last updated 11/21/24.
⁴ Student Loan Debt Statistics, LendingTree, Updated 8/16/24.
⁵ A 鈥渜ualified withdrawal鈥� is any distribution made after the 5-year tax period and one of the following apply: One or after age 59 陆, disability or made to the beneficiary or to the estate after death. First-home purchase with restrictions. A distribution that would otherwise meet the requirements of a 鈥渜ualified distribution鈥� will not be treated as a qualified distribution if such payment or distribution is made within the 5-taxable year period beginning with the first taxable year for which the Roth conversion contribution was made.

麻豆传媒 does not provide tax, financial or legal advice. Taxpayers should consult their own independent qualified professionals as to their personal circumstances.