MADISON, Wis.–How can credit unions help take some of the pressure off the so-called Sandwich Generation?
A new report from the Filene Research Institute offers some strategies. The report, “Relieve the Squeeze: The Sandwich Generation,” assesses the needs of millions of working Americans who manage the financial demands of children, while also supporting a parent. The research provides insights to help credit unions understand this population, and offers suggestions for the types of financial products and services to best support the Sandwich Generation, according to Filene.
“Other studies have examined the basic outline of the Sandwich Generation, but few narratives exist that introduce financial professionals to their day to-day challenges,” said Stephanie Galligan, research manager for Filene and author of the report. “This research seeks to put a face on the phenomenon – to explore how this generation’s members spend, save, and invest, what difficulties they encounter, what drives their financial stress, and how financial institutions can help.”
Filene pointed to Pew Research Center data showing that in the United States nearly half of adults aged 40–59 years have a parent aged 65 years or older and are either caring for a younger child or financially supporting a grown child.
“Squeezed from above and below, this demographic is known as the Sandwich Generation,” said Filene. “Individuals of the Sandwich Generation are financially stressed due to the financial burden placed on them. Pensions, healthcare, and retirement benefits planned by previous generations are sometimes insufficient for today’s high costs of living. Additionally, recent economic conditions have made it difficult for young adults to obtain employment that pays a living wage, resulting in adult children seeking financial support from their parents.”
According to Filene, the report finds that this generation may be at its financial tipping point. More than 70% of respondents said that money was tight while only 28% reported they were living comfortably. The majority of respondents were either just meeting their basic needs or meeting them with just a bit leftover, while 8% said they couldn’t even fully cover basic expenses. Half of respondents said that providing financial assistance to their parents and grown children made it difficult to pay their own household expenses, Filene said.
“Credit unions have an opportunity to alleviate some of the stress burdening their Sandwich Generation members,” according to Filene. “Consider introducing targeted products and services to lessen the financial squeeze, such as flexible savings, specialized access to parents’ and adult children’s banking accounts. Introduce facilitated communication between generations, multigenerational financial planning, and products that address the rising costs of healthcare.”
For info: “Relieve the Squeeze: The Sandwich Generation,” sponsored by CUNA Mutual Group.