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According to a recent survey, a considerable 60 percent of India's "sandwich generation" is anxious about their financial future. This term refers to individuals aged 35 to 54 who are responsible for the financial needs of both their children and aging parents. The phrase emerged in the late 20th century as life expectancies increased and childbirth was delayed. The financial choices and everyday lives of those in the sandwich generation are largely shaped by their dual responsibilities of caring for both their offspring and their parents. A typical day for someone in this demographic might involve taking their mother to a medical appointment in the morning, assisting their child with homework later in the day, managing a significant work deal, and stopping by the grocery store on their way home. Edelweiss Life Insurance, in partnership with YouGov, conducted a survey encompassing more than 4,000 individuals from this generation across twelve major cities, including Delhi, Mumbai, Ahmedabad, Kolkata, Chennai, Kochi, and Chandigarh.
A notable 60 percent of participants indicated that, regardless of how much they save or invest, it always feels inadequate for the future. Over half of the respondents expressed concern about potentially running out of funds. This scenario is not unprecedented in India, yet the particular social and economic hurdles faced by this generation are distinct. The substantial dependence on credit cards and loans, alongside rising living expenses, costly healthcare, and education, alongside a desire for an improved quality of life, complicate financial management for this group.
Their primary worries revolve around the future expenses of their children’s education, anticipated healthcare costs, an imbalance between work and personal life, and the declining health of their parents. Despite these concerns, they also continue to enjoy family vacations and strive to maintain a decent quality of life, even if it puts additional strain on their finances. This unwavering commitment has led many in the sandwich generation to deplete their earnings and savings rapidly, demonstrated by their significant reliance on credit and the necessity of withdrawing investments prematurely. For this generation, the three main short-term goals include taking their parents on trips and enhancing their current quality of life. In the long term, they aim to support their children’s marriages, secure sufficient savings for retirement, and travel extensively.
Individuals gravitate towards financial tools such as life insurance, health insurance, mutual funds, equities, and bank fixed deposits. However, findings from a survey reveal that many often tap into these investments earlier than anticipated. The primary reason for this early access has been identified as medical costs. Those in what is known as the Sandwich Generation find themselves continually balancing immediate needs with long-term financial planning. While this group appreciates the significance of planning for the future, they are equally dedicated to creating a fulfilling life for their children and ensuring their parents can enjoy their lives through travel and enhanced living conditions. They are also motivated to fulfill essential requirements, which results in an increased reliance on credit and the early liquidation of assets before their expected terms.
The survey indicated that the typical monthly income for households ranges from Rs 1,00,000 to Rs 2,50,000. However, the burden of dual responsibilities often hinders this generation from truly enjoying their earnings. Approximately 43 percent of participants conveyed a sense of dissatisfaction with their purchases, perceiving them as wasteful. This feeling of guilt originates from a perception of insufficient funds, particularly regarding future stability. Such ongoing sentiments of inadequacy give rise to ‘money dysmorphia,’ where, despite having available resources, individuals feel unprepared financially and find it challenging to feel secure about their future. What solutions might alleviate this strain? Accessing financial guidance could assist in achieving better planning and managing the intertwining emotional and financial pressures they face.
