Why Almost Half the ‘Sandwich Generation’ is Delaying Retirement

Almost half (47%) of respondents from what is known as the “Sandwich Generation” indicated that they are delaying their retirement plans to provide financial assistance to their elderly extended family members or grown-up children, with a similar 46% using their retirement savings to cover these costs, according to a new survey from Athene. 

Termed the “Sandwich Generation” due to their responsibilities to older parents (mostly Baby Boomers) at one end and their own children at the other, a significant number of individuals aged 40 to 59 find themselves as caregivers for both older and younger relatives, all while trying to reach their own financial objectives. In a survey of Americans in this age group with children, 76% mentioned financially supporting their adult children, and 63% said they offer financial assistance to their aging parents.

Among all participants, which included more than 400 adults, 55% reported an annual income of less than $100,000. This group’s primary concern was having insufficient retirement savings, followed by worries about being unable to maintain their desired lifestyle during retirement. Among those earning more than $100,000 annually, 66% shared the same concern about maintaining their post-retirement standard of living. 

“For many who are a part of the Sandwich Generation, they may face a unique challenge of supporting multiple generations while also trying to keep their own goals in mind,” the report stated. “This will require a flexible financial plan and empowering their family members to take part in their own financial futures.”

When the Sandwich Generation considers their own retirement, 66% expect to rely on Social Security as a primary source of income, followed by 401(k) accounts and investments. Nearly one-quarter of respondents have included annuities in their financial portfolios.

Of course, with almost 50% prepared to retire without delay, there are another 50% of participants who indicated their support for family members has not affected their retirement objectives.

In addition to direct financial support, members of the Sandwich Generation often are managing the financial issues of their children and parents, according to the researchers. The study uncovered that many household heads are acting as sources of financial education for their adult children, including help with opening bank accounts, explaining credit and debt concepts, discussing budget management and promoting healthy financial habits. Moreover, the reported also noted that some members of the cohort are assisting their parents in planning for health care costs, estate planning and retirement income management. 

An analysis of the study’s responses revealed significant disparities between how men and women approach financial decisionmaking, seeking professional financial guidance and their overall confidence in being financial providers. The study identified that males are more likely to assume sole decisionmaking roles within the household, collaborate with financial professionals and exhibit higher confidence in their ability to care for adult children and extended family. Women expressed less confidence, with only a small percentage seeking assistance from financial professionals. 

The research conducted by Athene surveyed 409 Americans aged 40 to 59 who financially support adult children aged 18 or older and have parents or extended family members residing with them. The survey took place from February 21 to March 7.