Millennials just getting used to “adulting” may have a new responsibility to worry about: providing financial support to a parent.
Most of the time it’s cash flowing in the opposite direction. A little more than a third of adults ages 21 to 45 get financial support from a parent, with help most often received on cellphone service, food, utilities and insurance, according to a recent survey from financial planning group Society for Grownups.
A Pew study released this spring found that for the first time in more than 130 years, adults age 18 to 34 are more likely to be living in their parents’ home than with a spouse or partner in their own household.
But some young workers are taking on sandwich generation responsibilities early. It’s a trend that’s only starting to gather steam, said Catherine Collinson, president of the Transamerica Center for Retirement Studies.
“We see that many, many Americans who are retired now have relatively little in savings, to make their savings last a lifetime,” Collinson said. “The natural fallback for a savings shortfall will be family members, and likely, adult children.”
“That tidal wave isn’t quite here yet,” she said.
Already, 19 percent of millennials are a “financial supporter” of a parent, to the tune of an average $18,250 annually, according to a 2015 TD Ameritrade report. In a new Transamerica survey, 14 percent of millennials cited supporting parents as a current financial priority — double the rate of Generation X workers.
That Society of Grownups survey estimated that 17 percent of respondents are providing financial support to their parents, and 14 percent expect to begin doing so within a year.
Worries about that support have popped up in the data, too. In a recent Schwab survey, 1 in 10 millennials said “taking care of aging parents” is a concern that keeps them up at night, while 40 percent of respondents in a Wells Fargo report said caring for children or aging parents has made their own long-range financial planning more challenging.
Originally published CNBC.com