Many baby boomers are helping to financially support both their parents and their adult children. Almost a third (31 percent) of relatively wealthy Americans are supporting older and younger immediate family members at the same time, according to a new Merrill Lynch Wealth Management survey of 1,000 people with investable assets of $250,000 or more.
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In order to support relatives, while at the same time planning their own retirement, many of these affluent baby boomers say they have made lifestyle sacrifices (45 percent) and cut back on personal luxuries (44 percent). A quarter of these retirees sandwiched between eldercare and childcare responsibilities have stopped saving for retirement to take care of more immediate financial needs. Another 12 percent of wealthy baby boomers have stopped saving for a child’s education.
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“Many folks find themselves slipping into the sandwich generation without really understanding the scale of financial commitment involved,” says Andy Sieg, head of retirement and philanthropic services at Bank of America Merrill Lynch. “What starts as a manageable expense increases as your parents become more reliant on you as their health care needs increase.”
About one in five of those surveyed are considering inviting their adult children or parents to return home to cut living expenses for both or all three parties. Women were twice as likely as men to make financial sacrifices in order to better care for others.
The emotional challenges of caring for relatives may be even more difficult to manage than the financial costs. Some 57 percent of Americans between the ages of 18 and 90 are concerned about the emotional strain of caring for a relative, compared to 49 percent who are worried about paying for long-term care expenses, according to a recent Age Wave and Harris Interactive survey of 2,939 people between the ages of 18 and 90. Many people are also concerned about the affects care giving would have on their lifestyle (21 percent), other family relationships (21 percent), and career (19 percent).
Check out this woman’s story of Cutting Back on Work to Take Care of Mom.