SerpApi.Org
Millions of Americans provide financial support to their family members — even when it cuts significantly into their retirement savings.
Unfortunately, financial planners dramatically underestimate how hard it is for people to break this spending habit.
According to the 2025 Protected Retirement Income and Planning (PRIP) study, 17% of consumers support children aged 26 and older, while 10% support grandchildren and 7% provide support for parents or in-laws. An additional 9% support other family members.
More than half of these respondents indicate that their financial support of these family members affects their retirement savings.
Even more striking are the percentages of Americans who are willing to set aside their own basic needs in retirement to provide financial support to family members. When asked what trade-offs consumers would make to stretch their savings in retirement, reducing or stopping their financial support of family members is the least favorable among them.
· 58% are willing to adopt a standard of living below what they are accustomed to.
· 54% are willing to return to work either full- or part-time.
· 39% are willing to give up hobbies and personal interests.
· 29% are willing to live in a less desirable area or home.
· 25% are willing to delay making home or auto repairs.
· 22% are willing to move in with friends and family to save money.
· 21% are willing to skip medical care and treatments.
· 15% are willing to reduce or stop providing financial support to family members.
That so many Americans will forgo a doctor’s appointment or avoid repairing an air conditioner to provide financial support to family members demonstrates the widespread need for improved retirement planning. Helping consumers discern their ability to aid family members without making undue sacrifices is a job financial professionals are best equipped to perform.
Read: America gets a ‘D’ in retirement
Unfortunately, they underestimate the family-first financial priorities of their clients by a disparity of more than 2 to 1. When asked to identify the trade-offs their clients would make to stretch their savings in retirement, financial professionals indicate that 34% of them are willing to reduce or stop providing financial support to adult family members whereas just 15% of consumers indicate they would do so.
Financial professionals need to recognize this critical blind spot so they can help more Americans realize a financially secure retirement. Those belonging to the “sandwich generation” — many of whom are called upon to underwrite the living expenses of both their aging parents and adult children, while saving for their own retirement — are in urgent need of their guidance.
Read: My father died leaving an old will predating his fourth wife. Who inherits his estate?
After all, the sandwich generation, which generally includes Generation X, born between 1965 and 1980, are the first in many decades to enter retirement without widespread access to a pension. Meanwhile, the cost of healthcare, housing and education, which are typically among the financial burdens they help family members shoulder, consistently outpace the cost of living.
Read: Gen X is about to face the biggest Social Security decision — and a lot of money is on the line
Financial professionals can help consumers set boundaries based on how much financial support they can provide family members without jeopardizing their long-term security. This requires distinguishing wants like helping a child with a down payment for a house from needs like providing them with emergency support.
They can also ensure that consumers pay themselves first by contributing consistently to 401(k)s, IRAs or other retirement accounts. Financial professionals can also develop tax efficient strategies for providing financial support to family members, including 529 education savings plans for children or grandchildren and direct, nontaxable payments for medical expenses.
Given the steep decline in pensions, financial professionals can help consumers estimate how much income they will need in retirement to cover both essential and discretionary expenses. In turn, they can help consumers ensure that they have adequate protected income by providing guidance on when to declare Social Security benefits and whether to purchase an annuity.
Not every baby is born into wealth and privilege, but you can still set up your children for financial success. And, with the right steps, you can even help them get rich by the time they turn 18!Planning for a financially secure retirement coupled with the emotionally-charged desire to support one’s loved ones is complex, and financial planners can be very helpful. The sooner they recognize the family-first priorities of consumers, the better.
Jean Chatzky is a fellow in the Retirement Income Institute by LIMRA and the founder and CEO of HerMoney.com.
