The Federal Reserve lowered interest rates Wednesday, but that is unlikely to allay the anxiety that millions of Americans feel about their long-term financial security, according to Allianz Life.
Even as borrowing costs fall, Americans are dealing with more uncertainty than ever, it said, especially around retirement income, health care costs and risk management.
A study that Allianz Life published this summer showed that only 28% of participants said they feel confident in their ability to financially support all their life goals, down 13 percentage points since 2020.
Members of the so-called sandwich generation are in an especially precarious financial position, buffeted by concerns about inflation, market volatility and the viability of Social Security.
This cohort — 46% of millennials and 18% of Gen Xers — have the dual responsibility to care for their own children and aging parents. Allianz Life found that 78% of Americans in the sandwich generation are providing their parents with physical, financial or emotional support.
And this is taking a toll. Three-quarters of Americans in the sandwich generation said they find it hard to juggle their financial needs and goals because they are caring for their children and parents. Sixty percent said they were caught unawares by the need to support their parents at this time.
Seven in 10 study participants said that caring for both their child(ren) and parent(s) simultaneously has upended their retirement plans. Fifty-nine percent of those surveyed reported that they have reduced or stopped contributing to their retirement savings account because of having to financially support their parents and children.
“Caring for both your young children and your aging parents can be overwhelming for both your time and your finances,” said Kelly LaVigne, vice president of consumer insights at Allianz Life. “While you may feel it is your responsibility to care for everyone, it’s important to keep your own best interest in mind for your long-term security.”
Not doing so, LaVigne said, can have costly consequences later on.
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