Dive Brief:

• Parents who aid their unemployed adult children financially make up the difference in their budgets by spending less on food, working more and downsizing their retirement savings, according to a new RAND Corporation study.
• Researchers assessed the outcome of a child's unemployment on parents' financial assistance and examined the effect on the parents' food consumption, income and savings.
• "On the individual level, most of the changes were small," said Kathryn Edwards, lead author of the study. "The problem is what this means in the aggregate. When the labor market risk of one generation is informally insured by another, the older generation may be putting their retirement security at risk, while the younger generation has insurance that depends on how willing and wealthy their parents are. This is a trademark of basic economic inequality."

Dive Insight:

While unemployment is obviously a major financial stressor, working employees are extremely worried about their finances, too. A third of workers worry about money problems at work, according to a recent study, and debt is their top concern. Employees like the idea of employers providing assistance in this area and would welcome help with figuring out how much money they should have for retirement (75%), as well as general financial planning (68%).

When employees are worried about non-work issues, they're less productive when they're at work. According to U.S. Bureau of Labor Statistics, the U.S. has about 128.5 million full-time employees earning an average of $21 per hour. This means employers lose billions when these workers are disengaged or unproductive — which they are, at least five hours per week, according to one study.

For a variety of reasons (including helping grown children and having insufficient savings for their own retirement), workers are working longer, and phased retirement is becoming an increasingly popular option.

Phased retirement programs allow employees to continue working, often for a limited number of hours per week, while collecting specific benefits. The arrangement may continue anywhere from a few months to a few years, or even indefinitely.  

Thirteen percent of surveyed employers offered informal phased retirement programs in 2017, according to the Society for Human Resource Management (SHRM), up seven percentage points from 2013.