PITTSBURGH, Feb. 26, 2019 /PRNewswire/ -- Despite actively
saving and preparing for retirement, members of the sandwich
generation report they have been unable to build robust emergency
savings and retirement account balances primarily due to the strain
of financially supporting other family members.
Nearly four in 10 (38 percent) indicate they do not have an
emergency savings fund, and a third have less than $25,000 saved for retirement, according to The
PNC Financial Services Group's recent survey of members of the
sandwich generation.
The demographic is acutely aware of its financial shortcomings,
but instead of that knowledge spurring action, the stress of the
responsibility is overwhelming to the point of creating an
unpreparedness for the future.
"Our survey revealed that many members (29 percent) of the
sandwich generation would prefer to bury their heads in the sand
and avoid thinking about their finances," said Rich Ramassini, director of Strategy and Sales
Performance for PNC Investments. "The reality is that the only way
to improve your financial situation is to be honest with yourself
and commit to making the necessary changes required to prepare for
the future."
Thirty-eight percent of survey respondents report that they do
not have an emergency fund, and another 31 percent have an
emergency fund that would last less than six months.
More than half of respondents have $100,000 or less saved for retirement, with 32
percent reporting an account balance of less than $25,000. The average retirement account balance
among the sandwich generation surveyed is $170,346.
"We can see that the sandwich generation is struggling to save
for their own needs. When you add in the demands associated with
financially supporting children and/or elderly family members now
or in the future, it paints a very grim picture for this
demographic's future unless they take immediate action," Ramassini
said.
Key survey findings include:
Financial obligations
sandwich generation members have to their family members. Eight
percent of respondents report that they currently have financial
responsibilities for both parents/elderly family members and
children of any age; 45 percent are financially supporting either
children or parents/family members; and 47 percent do not have any
financial obligations to other family members.
Twenty-five percent support children under the age of 18, 17
percent support adult children over the age of 18 and 16 percent
are currently caring for parents or elderly family members, though
almost double (32 percent), expect to care for an elderly family
member within the next five to 10 years. However, only one in five
respondents have actually planned for those expenses, however.
"Because Americans are living longer, their expenses in
retirement will only increase. Whether it's day-to-day expenses,
the cost of healthcare or other needs, retirement is expensive,"
Ramassini said. "Unfortunately, many retirees will be relying on
their adult children to supplement their income in retirement. Yet
we see that Americans are largely unprepared to assume those
expenses, and most of them don't expect to financially support
family members. Unfortunately, that's wishful thinking."
The survey indicated that respondents who support parents or
elderly family members are more stressed than those who are
supporting children under age 18, though respondents with
multi-generational financial responsibilities report being twice as
overwhelmed as those who do not have financial responsibilities for
children or elderly family members.
The one thing that increases feelings of financial
security. The survey asked respondents to report whether or not
they had a financial plan (written or informal) and/or a financial
advisor. Very few (16 percent) have a formal financial plan, though
51 percent indicate they have an informal plan.
The results found a correlation between having a financial plan
and stress levels.
Sixty-one percent of respondents without a plan reported feeling
stressed about their finances, compared to 24 percent of those with
a written plan who indicated they felt the same.
Similarly, 44 percent who do not have any type of financial plan
say they would rather not think about their financial
responsibilities. Less than a fifth (17 percent) who have a written
plan feel the same way.
"A financial plan will not only help you document what you need
to do in order to achieve your goals, but now we also know that it
can influence people's emotions and confidence," Ramassini said.
"The best strategy to feel more financially prepared and have a
greater chance of reaching your goals is to work with a financial
planner who can create a personalized plan that incorporates your
unique situation, objectives and
habits."
PNC Investments LLC is a member of The PNC Financial Services
Group, Inc. (NYSE: PNC). PNC is one of the largest diversified
financial services institutions in the
United States, organized around its customers and
communities for strong relationships and local delivery of retail
and business banking including a full range of lending products;
specialized services for corporations and government entities,
including corporate banking, real estate finance and asset-based
lending; wealth management and asset management. For information
about PNC, visit www.pnc.com.
Methodology
The Sandwich Generation
Survey was commissioned by PNC to identify attitudes and
behaviors of millennials. The study was conducted online between
Aug. 1-13, 2018 and sourced from an
online panel of consumers. Participants were screened to be between
36-60 and reported they were actively involved in household
decisions regarding the selection of financial investment,
brokerage or mutual fund companies. Survey results are
balanced in accordance of the US Census population distribution for
age and gender to ensure representativeness. No weighting was
required. The survey was designed by Chadwick Martin Bailey, a market research firm
specializing in custom research.
This report has been prepared for general informational purposes
only and is not intended as specific advice or recommendations.
Information has been gathered from third party sources and has not
been independently verified or accepted by The PNC Financial
Services Group, Inc. PNC makes no representations or warranties as
to the accuracy or completeness of the information, assumptions,
analyses or conclusions presented in the report. PNC cannot be held
responsible for any errors or misrepresentations contained in the
report or in the information gathered from third party sources. Any
reliance upon the information provided in the report is solely and
exclusively at your own risk.
CONTACT:
Lauren Davis
(215) 585-7158
lauren.davis@pnc.com
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SOURCE PNC Financial Services Group, Inc.