Many American’s plans to pay for their parents’ long-term care could jeopardize their ability to afford their own care in the future, suggests the results of a new survey.
The Policygenius Sandwich Generation Survey obtained responses from 310 Americans who are financially supporting both their children and their parents, the so-called sandwich generation. More than half (52%) of them said they have provided some kind of assistance to their parents in the past year, including scheduling doctor’s appointments or transportation (73%), financial assistance (44%) or hands-on care with activities of daily living (55%).
When survey-takers were asked how they would cover a $4,500 monthly caregiving expense — the median monthly cost of assisted living — for their parents if needed, 40% said they would use savings, and 33% said they would assume debt.
Additionally, 40% said they would spend less on themselves, 38% said they would take on another job and 15% said they would spend less on their children. (Respondents could choose more than one answer.)
Survey results also show that many Americans still don’t understand long-term care financing. When asked how they would pay for professional care — such as assisted living, skilled nursing or home care — if their parents needed it, 48% of respondents said they would rely on Medicare, but Medicare does not pay for long-term care.
Additionally, 30% of participants said they would use Medicaid, 18% said they would pay out of pocket, and 19% said they did not know how they would pay for a parent’s care.
Only 32% of respondents said they have discussed future financial needs with their parents, whereas 24% said they have not discussed with their parents this or any other future financial issue, including wills or estate plans (45% have had such discussions), end-of-life care wishes (47%), or their current (36%) or future (32%) financial needs.
Annual child-rearing costs are estimated at $12,000, and 52% of poll participants said they expect that supporting their parents will cost just as much, if not more (16%), over the next five years.
The reality is leaving members of the sandwich generation feeling stressed, according to survey results: 66% of participants said they are either very stressed (29%) or somewhat stressed (37%) about their ability to afford their family’s financial obligations over the next 10 years.
The online survey was conducted Nov. 7 to 9.