Families are constantly evolving, and multi-generational households are becoming more common. Many parents today take care of young children and aging relatives at the same time, or find that their adult children are returning home to live and navigate financial obstacles. While this trend has been happening for a while, people are re-evaluating caregiving and its financial impact in the wake of the global pandemic.
To assess how people consider their financial caregiving responsibilities, New York Life surveyed Americans of the “Sandwich Generation” – those providing care for both children (including adult children) and aging relatives. We found that those who prepared for the possibility of caregiving over the long term were better equipped to deal with both the financial and emotional toll of taking care of their loved ones.
The financial cost
According to our research, seven in ten respondents that are currently providing any type of financial, housing or caregiving support expect to be doing so for at least a year. But, many are preparing for a longer-term commitment – two in five expect to be caregiving for more than three years and one in five expect to do it for more than six years.
Many of these Sandwich Generation parents are paying for the costs of caring out of their own budget and half said that they had made sacrifices to their own financial security. Over a quarter of caregivers had dipped into their rainy-day fund, 27 percent have taken on more hours at work and 11 percent have paid out from their retirement savings.
Having a professional partner to navigate these financial shifts
However, as with most financial expenditures, it pays to have a strategy. The majority of those not prepared to provide care for six or more years (52 percent) are contributing less to their savings.
But seven in ten of those prepared for six-plus years of care are able to contribute the same amount or more to their savings.
Not only has having a ‘roadmap’ for their finances made these caregivers feel better equipped to face their financial future, but it also allows them the space to enjoy the time they are spending with their relatives and take care of themselves. A greater rate of those prepared to care for six-plus years said they were spending much more quality time with loved ones (34 percent), compared to those not prepared (26 percent). They also said that they had more time for sleeping, rest and relaxation and taking care of their own physical, emotional or mental wellbeing.
Preparing for the unknown
We cannot anticipate the unexpected, and certainly not a crisis of the scale of the pandemic. But when difficulties arise, we can prepare ourselves to make changes to our finances and take steps toward building a financial strategy that can balance caregiving with our own financial future.
Having a trusted partner and financial professional that can understand the physical, emotional and financial impact of caregiving, while also understanding your current coverage and empowering you to follow a strategy that protects and provides for your family, can be invaluable.
Go back to our newsroom to read more stories.