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Americans say caring for aging parents is more important than saving money to hand down to your children

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Ashley Ray was in the midst of purchasing her "dream car" when she got a troubling call from her mother.

"I haven't wanted to worry you, but we're behind on the mortgage and it's gonna go into foreclosure next week if we don't pay," the TV writer and comedian says her mom told her.

Ray's car deal was delayed, so she was able to use the money to help her mom avoid losing the house. "I was like, 'thank goodness that car deal didn't go through,'" Ray tells CNBC Make It.

She was glad to be able to help her mom, but as she told her Twitter followers, "god loves a joke."

Ray's not alone in wanting to help out her mom. And while the level of responsibility Americans take on for their adult family members varies, the majority say they feel the most responsible for taking care of their elderly parents, according to a new study from Pew Research

The highest share of respondents — 66% — said adult children should have a great deal of responsibility for caregiving for a parent who needs it, according to Pew's survey of over 5,000 panelists conducted in April 2023.

The survey asked respondents to rank the "amount" of responsibility — a great deal/fair amount, some responsibility or not much at all — people should have in various scenarios. 

Here is the percentage of Americans who said there was a great deal of responsibility in each relationship dynamic:

  • Adult children providing caregiving for an elderly parent who needs it: 66%
  • Adult children providing financial assistance to an elderly parent: 55%
  • Parents saving money to hand down to their children after they die: 32%
  • Parents providing financial assistance to an adult child who needs it: 31%
  • Grandparents helping with child care for their grandchildren: 30%
  • Siblings providing financial assistance to a sibling who needs it: 24%

Trying to meet all the applicable obligations here would be difficult for anyone without access to a lot of capital. And as a result, many in the so-called sandwich generation — adults who are caring for their parents as well as their own children — are stretching their own resources thin or facing difficult money decisions between their own needs and those who rely on them.

In fact, 66% of sandwich generation members reported feeling at least somewhat stressed about affording their family's financial obligations over the next 10 years, according to a January Policygenius survey

It can be stressful to prioritize your own long-term financial needs when other people are relying on you. But setting boundaries and determining how much help you're able and willing to offer can help you avoid sacrificing your own financial wellbeing.

Put yourself first, financially

When there's an unexpected cost, especially when it's a large one like in Ray's case, caregivers face a difficult decision. Whose needs should be put first, your own or your family member's?

"It was frustrating and it is frustrating that I am put in a position where I have to take care of someone who should take care of me," Ray says. "But [my mom] also feels that frustration. She also hates asking, and I wish [she] had said something sooner." 

Luckily, Ray was in a secure enough financial position to help her mom, but she acknowledges doing so meant putting her mother's needs before her own. Ray's previous car was stolen, which is why she needed a new one in the first place. But her transportation needs were still an easier trade-off than letting her mom lose her house.

"I don't know that I would have been able to make that same decision if I knew I had to pay tuition or daycare for my kid," Ray says.

But sometimes, you may need to take care of yourself first, and that's OK. Middle-aged adults don't have all the time in the world to catch-up on saving for retirement if they make financial sacrifices to take care of their parents, or their adult children.

"Especially as you get older, it's not like you have extra years where you can invest your money," Danielle Miura, a certified financial planner who specializes in planning for the sandwich generation, tells CNBC Make It.

If you're really trying to set your kids up for financial success, it's a good idea to make sure your own retirement savings are as flush as possible to cover your costs as you age and avoid relying on your kids for help.

Who to prioritize if you're 'sandwiched'

If you're faced with the decision of doing more financially for your own kids or supporting your aging parents, there are good reasons to "choose" your parents — and yourself.

You may feel some obligation because they are the people who raised and took care of you. There can also be a cultural expectation to take care of your parents and other relatives as they age, Miura says.

But aside from the emotional reasons, it makes a bit more sense logistically.

Teens and young adults have time to figure out their own finances and how to support themselves without an inheritance. But a caregiver is running much lower on time to prepare for their own retirement, and their parents may be out of time to be earning their own money at all.

"[Caregivers are] probably thinking, 'if I'm dipping into savings to take care of my parents and take care of myself, my kids can figure it out for themselves,'" Miura says. "That sounds mean, but they have many more years to figure things out and invest and financially prepare than the average caregiver" who is typically in their late 40s to 50s, according to a 2020 AARP study.

How to put boundaries in place without cutting on care

You don't always plan to support your parents, financially or otherwise. "Many people stumble upon family caregiving," Miura says, highlighting the fact that many people do or will become caregivers unexpectedly due to illness, injury or financial hardship.

Around 40% of family caregivers were not prepared to take on that role, according to a 2017 AARP survey.

But when it comes to supporting older family members, it's important to continue putting yourself first as much as you can, Miura says. While she bases all her financial planning with clients on what's most important to them, she often sees those values shift when people become caregivers unexpectedly.

"Now I'm in caregiving mode, I'm taking care of someone, they're my full priority, not necessarily my retirement nest egg," she says of the mindset many of her clients take. "As they're shifting out of caregiving, they're rebuilding their retirement nest egg again, and often that's too late."

When you take on a caregiving role, it's smart to put boundaries in place for how much care you're willing and able to provide.

"We need to figure out where those boundaries lie, and how much we can really handle ourselves as family caregivers," Miura says. "Is there a plan B in place to take care of ourselves so that we don't feel obligated to put ourselves in a financial position that we're not comfortable with?"

Miura says it can be a financial limit, time limit or even an emotional limit at which point you transition to your plan B.

Unfortunately, there may not be a lot of options for elder care, and even fewer options that are attractive to you and your loved ones.

But if you're pushed beyond the boundaries you set, Miura says you should consider the consequences and what it will take to recoup your losses if, for example, you pull from a retirement savings account to help pay for your parents' care. 

"Planning out that plan B, whether that's asking for help through government resources or getting [an] expert opinion about how to move forward, is the best way to go about setting those limits."

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