Multi-generational families living in a single dwelling have been around for centuries, of course, but sociologists have identified a modern phenomenon dubbed the "sandwich generation" to describe adults who are raising children while simultaneously providing financial assistance to their parents.
Those families face additional challenges during the holiday season, but a new report from the
Among the findings of the study are that nearly half (47%) of adults age 40 to 59 are supporting a parent age 65 or older while also raising or supporting a child. Additionally, some 29% of young adults between the ages of 25 and 35 still live with their parents.
According to Stephanie Galligan, Filene research manager and author of the study, there isn't a lot of advice being offered to "sandwich generation" families.
"These people need to be told: 'Put yourself first, put aside some money in a retirement account,' she said. "Credit unions can start by identifying the individuals in their market that this pertains to and then make sure to understand the multigenerational family dynamic."
Galligan's study notes that only 63% of the sandwich generation is saving for retirement, less than the national average (71%), and 49% are not building long-term savings for their children, such as educational savings plans. Half report having a hard time meeting their own household expenses because of the care they are providing to others. Despite this, 48% say it is difficult to talk with their parents about the support provided.
Chief among the questions the sandwich generation needs to ask is: How do you make sure everyone is safe financially? Galligan noted there has been increasing discussion in recent years regarding elder financial abuse, "But what about the parents?" she asked.
"It is difficult for children to have these conversations with their adult parents," she said. "Adding people to the adult parent's checking account to monitor activity is one option, but that creates anxiety about a loss of autonomy. People feel doing so involves giving up control."
Galligan,
"Credit unions can serve as a community network, putting families in touch with organizations that can help," she said. "These can vary widely by where people live, so check with city and county social services."
Awkward Topic: Who Pays For Gifts?
For the holidays and birthdays, there is extra stress on the people who are funding others, Galligan noted in a recent interview with CU Journal. She said this dynamic can lead to touchy conversations, such as, "Do you want me to buy a present on your behalf for your grandchild?"
"I can only imagine this time of year increases stress," she said. "One of the biggest takeaways I learned in the interviews I did for this study is there are people who feel they have to help. In some cases there are multiple children, but only one is helping the elderly parent."
Galligan said she went in to the study with her personal experience of being in the sandwich generation. One of the biggest surprises she came across was cases when "mom and dad" are not good with money, and the child has been helping them since he/she got his/her first job.
"Many credit unions already offer some sort of financial literacy courses, but perhaps this could be a new direction – either helping mom and dad with money or making them accountable for their spending."
As a researcher, Galligan said she wants to know what the implications are going to be long term. For example, are these people in the sandwich generation always going to be strapped? Will their children continue the cycle and help them?
"If they have not saved for retirement, how can we help them? It is an interesting conversation to have. If baby boomers have not saved enough for retirement, how are Gen X and Gen Y going to help them?"
