Survey: 45% of Adult Kids Helping Parents Financially

Posted by: Lauren Young on April 22, 2009

Here is more proof the sandwich generation is getting smooshed: An astounding 45% of adult children who are caring for aging parents are providing them with financial assistance, according to a new survey of 3,000 caregiving adults conducted by Caring.com.

Andy Cohen, co-founder and CEO of Caring.com, expected a mere 10% or 12% of respondents to say they were giving their parents some financial support—the fact that 45% are helping mom and dad pay the bills is incredible. “We knew it was bad. We were just surprised at how bad it is. In fact, we were shocked,” Cohen says.

Where is that money being spent? The average adult child caring for an aging parent spends $5,534 per year for out-of-pocket expenses on items such as medications and safety equipment. Caregivers are paying with these items by tapping retirement accounts, savings, and vacation funds, Cohen says.

But dipping into your own savings isn’t usually a smart idea, particularly if your parents have some money already. “Caregivers don’t always do the right financial thing. They often do the right emotional thing,” Cohen says.

Some other surprising findings from the Caring.com survey, which was conducted in March:

• 31% of respondents fear they may, or already plan to, delay retirement

• 43% must severely cut back on “extras” like entertainment and vacations

• 37% will have less savings available when they retire

• 23% expect their parents may have to move in with them.

Considering that 34 million Baby Boomers already care for aging parents, the financial crisis has the potential to deplete nest eggs even further. Indeed, approximately two-thirds of respondents say they are more concerned about their parents’ financial situation following the recent market crash. Off the top of my head, I can name at least 10 friends who are helping out their parents financially.

For some tips on keeping your finances together while caregiving, check out this BusinessWeek special report on financial strategies for the sandwich generation.

How worried are you about your parents’ finances? Have you had to help your parents out financially since the economy collapsed? If so, how?

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