Sandwiched boomers feel the squeeze

By Mark Noble | January 5, 2010 | Last updated on January 5, 2010
3 min read

Boomers are the most affluent generation in history, making them an important group of clients. But advisors are not the only ones who’ve noticed; boomers are being bled dry by family members in other generations, a new study finds.

An Investors Group survey of 500 Canadian boomers — aged 43 to 63 — finds a large proportion are either supporting their children, their parents or in some more extreme cases, both.

While boomers as a generation have amassed a lot of wealth, 43% of those respondents who said they were supporting a family member expect that support will erode their ability to save for retirement.

“They are a large generation, I think there are 11 million boomers. They are a fairly prosperous generation, but this survey suggests they are facing a perfect generational storm,” Jane Olshewski, manager of financial life planning at Investors Group tells “For good reasons, boomers have parents living longer than before, while some boomers had children later in life, so college years and retirement years are converging at the same time. This is an interesting dynamic that no other generation has had to face in history.”

Four-in-ten (44%) boomer parents indicate that they are currently contributing to their child’s post-secondary education, or have already done so. A further two-in-ten (21%) expect to make this expenditure.

The majority of boomer parents (52%) say they expect their children to be financially self-sufficient by age 25, while more than half of the parents (535) say they themselves became financially self-supporting before age 21. The survey showed that six-in-ten boomer parents provide financial support averaging $3,675 per year to their adult children.

Olshewski suspects the higher barriers to entry for careers requires substantially longer educations for the children of boomers. Many boomers are an important source of funding for their children’s education, whereas 62% of boomer parents say that their own parents did not offer this type of assistance.

In addition to direct financial support, boomer parents are incurring additional costs to support children who live away from home.

Seven-in-ten (70%) boomer parents have children over the age of 19 living away from home. These parents travel 190 km per month, on average, to provide some form of assistance to their children. This assistance includes a wide variety of chores such as babysitting grandchildren, helping with major financial decisions, doing car repairs and performing home maintenance and repairs.

Two-in-ten boomer parents have a child aged 19 or over living at home. More than half of these (58%) say their adult child makes no financial contribution to the household.

The boomers in the most difficult financial situation are those providing financial support to both parents and children simultaneously. One in 10 boomers are currently in this group.

One third (34%) of the “sandwich” boomers say they’ve postponed or cancelled travel plans, and a third (32%) say they’re unable to focus on their own hobbies and interests. More alarming are the financial consequences of supporting two different generations of family members.

“We asked the question what kind of impact supporting both their parents and children was having. Four out of 10 say they are reducing the amount they expect to save in retirement, and one quarter of respondents say they have adopted a less comfortable lifestyle,” Olshewski says. “Two-in-10 of these boomers said they are actually taking on more debt.”

Olshewshki says helping boomer clients efficiently support family members is an area an advisor can add value.

“These boomers need to sit down with a planner, and figure out what it costs to support adult children and do that number crunching,” she says. “The advisor needs to be asking what kind of lifestyle do you want to have in retirement. What is the impact of the support you’re currently giving going to be to that retirement plan.”


Mark Noble