My generation

Sometimes, instead of a pie, you get a sandwich. There are costs associated with being part of an interdependent, intergenerational family unit. It is not uncommon today for Boomers, also referred to as “The Sandwich Generation,” to be simultaneously providing financial assistance to their grown children, ageing parents and, in some cases, even their grandchildren. One quarter of Canadian Boomers surveyed had one or more parents who require regular assistance, and the majority (59%) of Boomers who had children age 18 and over were still providing financial support to their children. On the other hand, a U.S. survey found that 40% (or 2.5 million) of all grandparents whose grandchildren live with them reported being responsible for most of their basic needs. These added responsibilities not only diminish the Boomers’ inheritances and existing retirement nest-eggs; they may also reduce or eliminate any hopes of inheritance for subsequent generations.

Risk factors such as longevity, the rising cost of living and intergenerational obligations, threaten to consume legacies that would have otherwise been transferred to future generations. But subtle differences in the way each generation views the world and the impact of outside forces beyond their control may also significantly shape the way money is channelled to the next generation.

Both seniors and Boomers agree on the importance of leaving an inheritance. However, seniors are likely to feel more obligated than Boomers to do so. The reason for this distinction may be that seniors grew up with an intimate understanding of deprivation, first surviving the Great Depression, and then fighting in the Second World War. Because they had endured such hardships, some seniors may feel compelled to provide financial assistance to others. In contrast, Boomers were raised in a time of relative peace and affluence, and have generally grown up accustomed to a life of abundance. Socially, they are idealists who value financial self- sufficiency, making the world a better place for all and enjoying a high standard of living. Unlike the seniors, they may consider leaving a legacy as a bonus instead of a requirement. As a result, intergenerational differences in perspectives on inheritance will affect the distribution of wealth.