Supporting family members was a top concern for 79% of millennials but only 38% of baby boomers. Paying down student loans and other debts ranked highly for 76% of millennials and just 36% of baby boomers. Lastly, credit card debt was named as a major drain for 71% of millennials and 40% of baby boomers.
Also, 43% of all working respondents reported they had needed to take time away from work to provide caregiving for a family member.
“Family responsibilities have forced ‘the sandwich generation’—those balancing caring for their aging parents and their own children—to deprioritize their long-term financial well-being, potentially impacting their retirement savings,” said Joe Duran, head of personal financial management at Goldman Sachs.
The Covid pandemic didn’t help any. Many working respondents withdrew funds from their 401(k)s to cover expenses, and 58% of baby boomers expected they wouldn’t be able to repay this money for at least three years, he said.
One conclusion from these statistics is that many clients feel forced to choose between their current obligations and their desire to save for the future. But Greg Calnon, head of GSAM’s multi-asset solutions, stressed that long-term retirement savings and immediate financial responsibilities can “co-exist.”
Chris Ceder, senior retirement strategist at GSAM, added that it’s not too late for most clients to get on course. “While many survey respondents report being behind schedule, there is still time to adjust,” he said.
The Need For Professional Guidance
This is where the financial advisory industry can help.
Among retirees, 79% said that financial advice and guidance are “important” to them. As for how they prefer to receive this support, 46% favored personal contact with an advisor. Only 27% preferred digital advice, and another 27% preferred a combination of both.
The survey also found that people seek financial guidance primarily for concerns about generating income (34% of respondents), understanding how long their savings will last in retirement (32%), and figuring out how to keep their savings on track (29%).
“Most advisors offer retirement accumulation and income planning, but not enough support clients in budgeting or managing competing financial priorities from elder care to education funding,” said Duran. “True financial planning requires working closely with clients on their entire financial lives.”
For those already retired, generating lasting income was a crucial concern.
“A clear theme from our findings is retirement income uncertainty,” said Moran.
Indeed, 42% of retirees wanted retirement income that’s consistent and stable. Many also favored finding part-time work to generate extra income in retirement, a desire cited by 34% of retirees—which was an increase of 9 percentage points from last year’s survey, perhaps indicating a greater need for or greater scarcity of opportunities.