Supporting the Sandwich Generation
The 'sandwich' generation, caught between caring for children and aging parents, faces significant financial pressures. Recent studies from Nationwide, the Alliance for Lifetime Income, and Morgan Stanley reveal the extent of these challenges and suggest that tailored workplace benefit plans can help alleviate some of the financial burdens.
Nationwide Findings
The Nationwide Retirement Institute Long-Term Care survey highlights the financial burdens on caregivers:
- Borrowing from Retirement Accounts: 56% would borrow from their retirement accounts to support a family member, risking long-term financial stability.
- Retirement Concerns: 43% worry caregiving expenses will prevent them from retiring.
- Depleting Savings: 42% expect to use funds intended for their children to cover caregiving costs.
- Out-of-Pocket Expenses: Caregivers spend an average of $338 per month on costs such as co-pays, prescription drugs, and transportation.
- Work Impact: 15% have switched to part-time work or lower-paying jobs to accommodate caregiving responsibilities.
Social Security and Financial Support
The Alliance for Lifetime Income study shows the ongoing financial strain on older Americans:
- Social Security Dependence: Half of Americans aged 61 to 65 have retired and started receiving Social Security benefits.
- Supporting Family: 28% continue to financially support adult children and extended family.
- Retirement Impact: 18% report that providing financial assistance to family members affects their retirement savings and income.
Workplace Benefits
Morgan Stanley's State of the Workplace Financial Benefits Study indicates the need for better employee support:
- Financial Hardships: 91% of HR leaders believe employees are experiencing financial difficulties.
- Employee Crises: Nearly half of employees faced financial crises in the past year.
- Employer Involvement: 81% of employees want more employer involvement in addressing financial challenges.
- Benefit Explanation: 85% of employees think their company needs to better explain how to maximize financial benefits, with 96% of HR leaders agreeing.
Scott Whatley, head of Morgan Stanley at Work, emphasizes the importance of comprehensive benefits for the sandwich generation. Employers can play a crucial role in helping these employees manage their financial futures through tailored workplace benefits and better communication.
