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Helping your Sandwich Generation clients

A recent study by 黑料吃瓜网 revealed that retirement for the Sandwich Generation may be at risk. Among respondents, 34% are putting off retirement to offer financial support to aging family members or adult children. What鈥檚 more, 22% are tapping into their retirement savings to help cover these expenses.

Offering this support while managing their own financial responsibilities, jobs and households presents unique financial and emotional challenges. Higher costs of living can make it harder. 

Retirement shifts for the Sandwich Generation

Some members of the Sandwich Generation have had to reset their financial priorities and shift away from saving and retirement to afford supporting their adult children and elderly relatives. Among respondents, over 40% are cutting expenses, one-third will delay retirement and over 20% are dipping into their retirement savings. The potential impact may be a shortfall in retirement savings.

Top challenges

You can help your clients in the Sandwich Generation feel more confident about their financial security by helping them address challenges. When surveyed, stress and anxiety, juggling multiple responsibilities and financial strain were three of the top challenges facing the respondents. However, working with a financial professional made a positive impact in helping respondents manage these challenges.

Are your sandwiched clients feeling supported?

The emotional and logistical demands of caring for elderly family members, combined with the financial strain of supporting two generations, is taking a toll on the overall well-being of the Sandwich Generation. And while the stress and financial strain can be hard on everyone, your female clients may be more affected. Challenges impact women and men differently.

Offer trusted guidance and support

With the number of responsibilities this generation juggles, professional guidance is more important than ever. Your clients in the Sandwich Generation may be in or close to their peak earning years, trying to build their retirement savings. Help reassure these clients you can create a flexible financial plan that accounts for their current responsibilities and keeps their long-term financial goals front-and-center. This support can help build their financial confidence and lessen some of the pressure sandwiched clients feel by helping them: 

• prioritize financial responsibilities and navigate logistics
• create a financial plan that prioritizes retirement
• talk openly with their families about money, estate planning and achieving financial independence

You can reassure your sandwiched clients by helping build their financial confidence and lowering stress levels. You can help them create a flexible retirement plan that accounts for current financial and caregiving priorities while keeping their retirement goals front-and-center. 

For example, respondents who own an annuity were less stressed, more confident and better prepared for retirement than respondents who don鈥檛 own one.

Building confidence beyond retirement security

Besides helping raise financial confidence, the survey also showed working with a financial professional helped respondents feel more confident in being able to help give family members the support they need.

As your clients鈥� go-to resource for information, you can help address their needs as well as their family members鈥� needs, like understanding a relative鈥檚 finances and estate plans. Your guidance may be helpful in asking the questions clients may find harder to ask their family members, like:

• What are your current sources of income?
• What are your plans for the future?
• Who is the executor of your estate?
• Do you have plans for end-of-life care?
• Do you have financial and medical powers of attorney?

Show ways to help improve retirement readiness

Your Sandwich Generation clients may pause saving for their own retirement to help their family members 鈥� paying down their children鈥檚 debt or paying certain expenses for older relatives, for example. Hitting pause on retirement savings doesn鈥檛 mean clients aren鈥檛 thinking about it or don鈥檛 have concerns you can help address. 

Only 27% of respondents said supporting family hasn鈥檛 impacted their retirement readiness. Some of your Sandwich Generation clients may be among the majority whose retirement readiness has been affected. When asked about retirement concerns, survey respondents expressed financial, physical and emotional concerns, with the top five being:

Reassure clients their financial wellness is important, and there are steps they can take to help keep their retirement plan on track. By creating a diversified portfolio that addresses their goals and future income needs, they can prioritize their own retirement while helping support their loved ones now. About two-thirds (67%) of the Sandwich Generation plans to use a 401(k) for their retirement income, and 65% plan to rely on Social Security. While only 11% of respondents plan to use an annuity as a source of retirement income, those with over $100,000 in household income are more likely than lower-income households to own an annuity, according to the survey. Since many annuities can offer growth potential and principal protection along with guaranteed income, these options may be a good diversification strategy for Sandwich Generation clients wanting more financial security in retirement.

Help guide positive financial discussions 

Besides offering financial support, many Sandwich Generation parents are helping their grown kids expand their money knowledge. Over 90% have talked with their adult children about finances, resulting in positive outcomes most of the time, according to survey results. Parents in the Sandwich Generation are trying to help educate the next generation about financial independence, including: 

• Helping them open a checking or savings account
• Explaining credit and debit
• Describing how a credit score works
• Encouraging employment
• Introducing budget management

You can play a supporting role by finding helpful ways to educate your clients so they can teach their loved ones. Some families may find it difficult to talk about money matters. Offering to mediate financial conversations with clients and their family members could help. Oftentimes talking about money can be stressful, but your guidance and encouragement could help these important discussions be more productive. 

Encourage your clients to meet with you regularly to assess their needs, spot changes that need to be made and discuss how you can offer more support. Even with the unique challenges they may be facing, your Sandwich Generation clients can find financial balance and empower those around them to reach financial independence. 

Check out our Sandwich Generation toolkit for insight into this group鈥檚 unique needs and find a variety of resources you can use directly with your clients. 

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