Yahoo Finance Senior Columnist Kerry Hannon joins Market Domination Overtime to discuss the financial squeeze facing millennials as they are forced to care for both their children and aging parents.
Tell us how caregiving uniquely is squeezing millennials.
Yeah, that’s right. They’re, AARP came out with a report last week looking at this group of people. It’s from the ages of 35 and 42. and it’s roughly, um, you know, three in 10 Americans are caught in this squeeze of caring for their aging boomer parents, um, and raising kids. And they’re just at that stage of life where they’re financially vulnerable. They don’t have kind of the resources to absorb the costs of the caregiving and the cost of raising kids. So they’re really feeling this crunch and nearly half of them are trying to hold down a full-time job while doing both of these caregiving duties. And, and it’s really taken a toll on them in in many ways. And in fact, those that have had to step away or move to part-time work are seeing a loss of income, obviously, and as the cost of bills keep rising.
And what does this mean for their retirement savings?
Yeah, I mean, that’s a big deal right there because the people that that, you know, we talk to for for our column and AARP mentions in their report. This is a group of people that have had to stop, you know, pause retirement saving because they don’t have the spare cash to do that. or they’re raiding their retirement accounts in order to pay for some of this. And as I mentioned, even stepping away from work where you’re not having an employer provided plan. So this takes a big toll on your retirement savings and your own future financial security because these often can be, you know, you know, as your earnings start to increase during these years and you’re losing out on the ability to sock money away during those years.
Right, and those are the breadwinning years by the way, when you should be squirreling away money for your retirement. But what are some of the options to possibly ease the burden on these people?
Yeah, I wish I had better news for you here. There’s not a whole lot out there. There’s one, you know, we have the Family and Medical Leave Act which, you know, offers people 12 weeks of unpaid leave from their employer in order to do caregiving, but that financially is not really going to help you. There’s a proposal now in Congress that would encour- would allow people to tap into their flexible savings accounts and their HSAs, their health savings accounts, to pay for the parents’ costs, you know, the cost of the parents’ care. But that is still not uh, in fruition yet. So, I think that that there aren’t a lot and and and you know, quite frankly, there’s not a lot of financial education around what should you do, what accounts should you pull from if you’re in this situation, and what might you do to help meet these these challenges.
And as the boomer population gets older, the challenges will only mount really. Thanks so much, Kerry.
Thanks.
