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The Sandwich Generation is getting squeezed. And it's not just an American phenomenon.
New research from The Hartford Financial Services Group, Inc., shows that a significant number of people age 45 and older in Japan, the United States, South Korea, Germany, and Great Britain say they have concerns about dealing with intergenerational financial obligations. To help them balance the cost of caring for elderly family members and their own children, many are making lifestyle changes, delaying major purchases, or not saving for retirement.
And some are struggling to make ends meet.
The survey, conducted by independent research agency Opinauri, revealed that many adults are caring for both children and parents or older relatives: 49 percent in South Korea, 40 percent in Germany, 29 percent in Japan, 28 percent in the United States, and 23 percent in Britain.
"Longer life spans are creating new pressures in the developed world, especially as many people are now caring for or expect to care for multiple generations," explained Lizabeth Zlatkus, president and co-chief operating officer of Hartford Life, Inc., a subsidiary of The Hartford. "Extended families can be a blessing, but they can also create financial pressures. As members of the Sandwich Generation prepare for their own retirements, they need innovative financial solutions to help them reach their own personal goal of a comfortable retirement."
To cope with the extra expense of caring for multiple generations, members of the Sandwich Generation are making lifestyle changes, such as reducing how often they dine out, delaying vacations, and making fewer purchases. This is truer in the United States (47 percent) than anywhere else: Germany (43 percent), Japan (43 percent), South Korea (35 percent), and the U.K. (33 percent).
In addition, meeting daily expenses is more of a concern for those in the U.S. (35 percent) than in other countries: the U.K. (26 percent), Japan (22 percent), Germany (17 percent), and South Korea (14 percent).
The financial burdens of the Sandwich Generation also prompted some of those surveyed to put off saving for retirement or other major financial goals. Again, this is more prevalent in the U.S. (28 percent) than in other countries: U.K. (22 percent), Japan (18 percent), South Korea (17 percent), and Germany (10 percent).
Sandwich Generation members surveyed indicated that it was "extremely" or "very" important to have a guaranteed lifetime income in retirement.
According to Zlatkus, The Hartford and many of its competitors in the United States, Japan, and the United Kingdom offer retirement savings products that allow consumers to invest in the equity markets in preparation for retirement and to guarantee their principal or income from those investments. Variable annuities with either principal or income guarantees have become highly popular in the U.S. and Japanese markets and are starting to catch fire in the U.K., she said.
"Competing financial responsibilities make it more difficult for many members of the Sandwich Generation to save and accumulate assets for retirement," Zlatkus said. "Because they have a tighter margin of error, members of the Sandwich Generation not only need to make the most of every retirement dollar invested, they need to protect and preserve their hard-earned savings."
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