MassMutual survey: Optimism amid sandwich generation fears

Shelly Gigante

By Shelly Gigante
Shelly Gigante specializes in personal finance issues. Her work has appeared in a variety of publications and news websites.
Posted on Aug 20, 2018

Affluent families are generally more confident about their retirement readiness, less likely to believe the American dream is disappearing, and saddled with far less credit card debt than they were five years earlier, according to MassMutual’s latest survey.

But many still fret about their financial security, including:

The 2018 State of the American Family found that 36 percent of respondents with household income of $75,000 or more and at least one dependent under age 18 were confident they were doing a good job of preparing financially for their retirement. That was up from 30 percent in 2013.

At the same time, 70 percent said they believed the American dream was alive and well, up from 59 percent five years earlier. Such optimism, however, may be tempered by the reality of their monthly bills. Indeed, while the vast majority of respondents defined the American dream as having financial security for themselves and their family, more than half (52 percent) said that they are not confident they are positioned to attain that goal.

(Respondents to the MassMutual survey also generally included “owning their own home” and “financial independence” in their vision of the American dream.)

“Americans believe financial security is at the core of the American dream, but it is alarming that so many think it is beyond their reach,” said Mike Fanning, head of MassMutual U.S. “It is clear that people are taking steps to help secure their financial future and dreams, and more can be done to help to keep the American dream alive.”

Retirement readiness

Energized by rising 401(k) balances perhaps, a greater share (38 percent) of affluent respondents this year also said they expect to retire earlier, between ages 50 and 60 — an 8 percent increase since 2013.

Here again, however, the message is mixed. Less than half (47 percent) indicated that they were confident they will actually accumulate sufficient savings to call it quits by their preferred retirement age.

(How about you? Retirement planning calculator )

Such uncertainty is prevalent across the retirement planning spectrum.

Despite the growing number of households who feel that they are doing a “good job” at preparing financially for their future, more than one-third (35 percent) worry about outliving their savings.

And, while the vast majority (78 percent) of affluent Americans surveyed had developed a general plan for retirement saving, only about half (56 percent) had actually done the math to determine how much money they need to comfortably retire.

“Through our work in all types of communities across the U.S. and in our continued research, we find optimism alongside fear, confidence alongside uncertainty, and most importantly, hope alongside desire to take steps for a stronger financial future,” Fanning said. “That’s where MassMutual can help.”

According to the MassMutual survey, more than a quarter (27 percent) of affluent respondents said they were aware that they should be doing more to save for their future, but can’t right now because they are still struggling to get by. That jibes with data from the Bureau of Economic Analysis, which found that the personal savings rate as a percentage of disposable income is trending lower nationally, falling to 3.4 percent in 2017, its lowest level in 10 years.1

In the case of higher-income households (and absent any job loss or unexpected expenses like medical bills), the inability to save is sometimes linked to financial mismanagement, said Mark Beaver, a financial professional with Keeler & Nadler in Dublin, Ohio. “It is common for people to live at their means,” he said. “As your income increases over time, so does your lifestyle. This is why the concept of ‘pay yourself first’ is so important. Before your lifestyle can creep up with your income, you should first take steps to increase savings and investing.”

Automating your savings by making direct deposits to your 401(k) or IRA can help promote retirement security, said Beaver. Other financial professionals recommend using future bonuses or salary increases to fund financial goals.

Credit card debt down, student loans up

Where debt levels are concerned, affluent households tell a tale of ebb and flow.

Amid the more robust economy, for example, survey respondents who carry credit card debt reportedly slashed their balances by nearly half to $11,000 from $21,000 in 2013.

The decline in high-interest credit card debt is an important bleed valve for household budgets, especially for those sending kids to college or still paying off student loans.

Survey respondents indicated that their student debt level climbed to nearly $45,000 from $33,000 in 2013, no doubt a byproduct of the soaring cost of tuition, which has tripled at public universities since 1997.2

(Learn more: When student loans are unaffordable .)

Sandwich generation still worried

According to the MassMutual survey, more affluent Americans (18 percent this year versus 10 percent in 2013) are also aware that their parents are counting on them to act as future caregivers, but said they don’t see how they can manage it financially.

Given the statistics, who can blame them?

A 2015 survey by the AARP and National Alliance for Caregiving found 34 million Americans had provided unpaid care to an adult age 50 or older in the prior 12 months. The vast majority (85 percent) were caregivers for a relative,— primarily a parent, parent-in-law, or spouse.3

Separately, the AARP found the average family caregiver spends roughly $7,000 per year, or nearly 20 percent of their annual income, on out-of-pocket costs, according to AARP estimates.4

(Learn more: Living in the sandwich generation )

Today’s sandwich generation, who is caring for both their children and aging parents simultaneously, does not want their children to experience the same struggle. Fully 78 percent of respondents to MassMutual’s survey said it is “important to me that my children aren’t burdened by taking care of me when I’m older,” up from 67 percent five years earlier.

Yet, very few are taking steps to prevent it.

According to the survey, fewer affluent households today own insurance products that are designed to negate that risk. The percentage of respondents who own long term-care insurance over the last five years dropped to 16 from 19, while the number who own disability income insurance , which helps protect a portion of the account owner's income if he or she becomes too sick or injured to work, fell to 31 percent from 39 percent.

The ownership rate of annuities also fell to 12 percent from 20 percent during that time frame. (Learn more: How annuities work )

Regardless of your financial position or household income, a financial professional can help you determine whether such products are a fit for your financial goals.

Learn more from MassMutual…

Refinancing student loans: What’s lost, what’s gained

Winning with steady investment


The State of the American Family survey was conducted for MassMutual by Isobar between January 19 and February 7, 2018, via a 20-minute online questionnaire. The survey comprised 3,235 interviews with American households with children under age 26 for whom they are financially responsible. This study includes trending data for the previous survey wave conducted in 2013. The sampling margin of error for this study is +/- 1.72 percentage points at the 95% confidence level when looking at the results for the total surveyed population.



Bureau of Economic Analysis, “National Data, Table 2.1 Personal Income and Its Disposition,” June 28, 2018.

U.S. News & World Report, “See 20 Years of Tuition Growth at National Universities,” Sept. 20, 2017.

AARP, National Alliance for Caregiving, “Caregiving in the U.S.” June,2015.

AARP, “Family Caregiving and Out-of-Pocket Costs: 2016 Report,” 2016.

The information provided is not written or intended as specific tax or legal advice. MassMutual and its subsidiaries, employees, and representatives are not authorized to give tax or legal advice. You are encouraged to seek advice from your own tax or legal counsel. Opinions expressed by those interviewed are their own, and do not necessarily represent the views of MassMutual.