Supporting Grown Kids Competes with Retirement Plans for Some

April 21, 2010 (PLANSPONSOR.com) – More than four-in-ten so-called “sandwich generation” parents (41%) continue to provide at least some financial support to their young adult children, according to the 2010 Families & Money Survey by Charles Schwab & Co., Inc.

Baby Boomer parents have often been referred to as the “sandwich generation,” reflecting the combined pressures of raising children and caring for aging parents, yet the Schwab survey found that the most significant layers of the sandwich seem to be the pressures of retirement planning combined with helping adult children, according to a press release. Not surprisingly, the biggest worries for mid-life parents are not being able to retire (29%), outliving their retirement money (22%) as well as not saving enough (22%), followed by the worry that their children won’t become financially independent (11%).  

When choosing between priorities, parents report that saving for retirement (56%) and helping their children financially (44%) are near-equivalent priorities.  

Only 6% of respondents provide financial support to both an adult child and an aging parent, and only 1% worries about supporting their own parents(s) out of the 85% that say they are at least a little worried about their financial future.   

Two-thirds of people surveyed (66%) believe there was a silver lining to the recent economic recession. Top lessons learned include “learning to live within my means” (49%) and being “much more involved now with my finances” (43%).   

Among the top behavioral changes people made were:

• being more cautious about credit card use (62%);
• asking more questions when it comes to financial decisions (59%);
• reviewing financial statements more closely (59%);
• reading the fine print in financial documents more closely (54%); and
• talking to kids more about money management (54%).

The press release said women are more likely than men to have made recent, positive changes in their financial behaviors and habits, including talking to their children more about money management (59% vs. 47%, respectively). Men are more likely than women to say there hasn’t been any silver lining to the economic recession (38% vs. 29%). 

Among those worried about their financial future, fewer women than men are worried about outliving their retirement money (19% vs. 26%).