BMO Nesbitt Burns today released a study which found that Canadians in the sandwich generation (those aged 45-64 who are known as being 'sandwiched' between the demands of caring both for their aging parents and for their own children), are more than half a million dollars short of their individual retirement savings goal.
The study is the second in an annual series examining the retirement readiness of a specific generation. Last year's study examined Canadian Boomers (those born between 1945-1964) and found that, on average, they are more than $400,000 short for saving for their ideal retirement lifestyle.
According to this year's study:
- More than half (55 per cent) of the sandwich generation are currently caring for their children, aging relatives (parents, in-laws, grandparents, etc) or both.
- Almost one-third currently care for a parent or older relative.
- Thirty-nine per cent of this cohort are concerned that being in the situation of caring for others will impact their ability to meet key financial goals, including saving for retirement.
"There's a sense among those in the sandwich generation that they're getting squeezed and are being forced to balance a plethora of financial priorities, from paying down their mortgage to saving for their child's education to saving for retirement," said Sylvain Brisebois, Regional Manager, BMO Nesbitt Burns. "The stress that comes with caring for children and aging relatives, balancing a career and generally keeping up with daily tasks can make it hard to focus on the future and saving for retirement."
Fail to plan? Then plan to fail
The study found that 76 per cent of this cohort feel that the stress of everyday living — such as working, taking care of family, paying household bills, helping older relatives, etc. — is impacting their ability to meet long-term financial goals.
Brisebois noted that one way individuals in the sandwich generation can help manage stress and prioritize goals is to develop a financial plan — a blueprint for a financial strategy that may include tracking or managing the household budget, savings and/or investments. Currently, only 40 per cent of those in the sandwich generation have a plan in place.
"This cohort grew up generally doing things much on their own. Much of what they have accomplished — getting an education, building their career, buying their first house — was done without the help of others," said Mr. Brisebois. "However, it's clear they need assistance when planning and prioritizing finances for the future. A financial plan can take away from the stress of worrying and leave more time to relax and find balance in everyday life."
The BMO Sandwich Generation Survey was conducted by Pollara between July 29th and 31st, 2014, with an online sample of 800 Canadians between the ages of 45 and 64 years.