For a growing number of Americans, retirement savings are getting lost in a "sandwich" of caregiving expenses.
That's according to
"You're trying to balance all of these financial obligations, and they're coming at you from both sides," said Miranda Marquit, a spokesperson for HireAHelper. "Plus you've got your own retirement, and you've got to figure out how you're going to manage your own financial goals."
The study surveyed 1,000 sandwich Americans, and their answers show the toll their predicament takes. Almost half — 46% — said their financial situation was getting worse, and 61% said they were anxious about the future.
The news was also bad for long-term nest eggs. One-third of respondents said their caregiving expenses forced them to sacrifice some of their retirement savings, either by contributing less to their 401(k)s or by postponing retirement itself.
"It's a little bit of both," Marquit said. "They might put off their retirement, or they might say, 'OK, I'll put a little bit less in for retirement. I've got to help pay for college, or I've got to help my aging parents move across the country to be closer to me.'"
The
To cover all these costs, caretakers often sacrifice some of their own income. Twenty percent of AARP's respondents took unpaid time off, 19% worked fewer hours and 6% quit their jobs. All of this can take away from a sandwich American's long-term savings, which they'll need to support their relatives.
"It can be tempting to cut back on your retirement contributions and not take care of yourself as much," Marquit said. "But that's only going to perpetuate the cycle in the long run."
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Many financial advisors have clients who are caught in this trap — and it's not just a matter of money.
"While taking care of three generations can drain a family's finances, what I see more often is a draining of time," said Mitchell Kraus, owner of
HireAHelper's research confirmed this. About 41% of respondents said being "sandwiched" negatively affected their mental health, 28% said it damaged their social life and 23% said it hurt their work.
"It is exhausting," one anonymous respondent told the survey. "I never know which direction I'm being pulled in. It is a daily struggle."
Financial advisors can help. Part of the solution, planners say, is to talk candidly with the family members about their finances — preferably long before they need care.
"The first step we recommend to our clients is to start an open dialogue with their parents," Kraus said. "Starting a conversation about where everyone stands can help build better understanding and sometimes open opportunities."
In some cases, Kraus said, this conversation can reveal that the parents have more savings than they realized, leaving more room for the client's own financial goals. In other cases, the parents have less than expected — but if the conversation happens early enough, at least the caretaker can plan ahead.
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And in some cases, the fact that multiple generations are involved can work to the client's advantage.
"Parents and children are often in different tax brackets, so looking at the tax advantages of certain family members paying certain bills can also help," Kraus said.
These discussions often bring up powerful emotions, including family loyalties and fears for the future. Advisors can
"Advising these clients is a balancing act," said Jonathan Cameron, co-founder of the RIA
Sometimes, Cameron said, a few simple words of support can help.
"These clients carry a lot on their shoulders," he said. "It can be very freeing when I tell a client simply, 'Do what you can.'"
Above all, advisors urge caretakers to prioritize their own retirement savings over other expenses. That may sound selfish to some clients at first. But in the long run, it's how they can make sure they're in a position to help their families in the future.
"It goes back to the old cliché about putting the oxygen mask on yourself first," Marquit said.
