Focused on offering the best to their parents and children, India's Sandwich generation feels unprepared for their own future. A new study by Edelweiss Life Insurance reveals that 60% of the respondents agree, "no matter how much I save or invest, I feel like it's never enough for future."
Sandwich Generation is defined as individuals in the age of 35 - 54 years, financially providing for two generations of dependents – their ageing parents and for growing children. The life insurer, in collaboration with YouGov surveyed 4,005 respondents in this generation across 12 cities in the country to understand their attitudes, beliefs and level of financial preparedness.
Edelweiss Life Insurance managing director and CEO Sumit Rai said, “The Sandwich generation is living in a cycle of caring for their parents and children. They want to enable the essentials like healthcare and education while providing an aspirational life where ‘needs’ don’t come at the cost of ‘wants.’
“This primarily drives their financial decision making and in the process, they often end up relegating their own dreams to the background, leaving them feeling they are unprepared for the future.”
Mr Rai said, “This generation knows their main aspirations and believes to be adequately planned through investments in their preferred product categories. But our study has brought up some curious facts. They display low intent on sticking with these active investments over next 1 – 2 years. They also have accessed their investments, which are earmarked for pre-defined goals, ahead of time. No wonder they are feeling they are on shaky ground.”
The study revealed that all the five preferred product categories have been prematurely liquidated, meaning accessed before their pre-defined goals were met. While essential needs dictated this liquidation, non-critical needs like vacation, spending during festivities, and more also emerged as the drivers. The top five preferred product categories include life insurance, health insurance, mutual funds, equities and bank FDs.
This generation’s key aspirations are focused on child’s future (providing for education and marriage), healthcare needs of parents, and improving the family’s standard of living. They show reasonably high confidence in financial planning, with 94% saying that they either have a detailed plan or have undertaken some degree of planning. A majority 72% also believes that their investments are linked to specific aspirations.
Yet, 64% said they use some form of credit to fund their short-term needs, while 49% savings. The study indicates that credit coupled with cash/income is allowing them to address critical needs like healthcare and education, but also providing them flexibility to meet non-critical needs like vacation, home renovation, etc.
For long-term aspirations, 79% expect to rely on returns or gains from financial instruments, and 71% on regular future income. It is interesting to note that this generation considers retirement among their top 3 long-term aspirations, a period wherein one stops receiving regular income.