Study reveals that 93% of boomers have provided financial support to their adult children and 58% have assisted their aging parents.
“Boomers are feeling the pressure financially and emotionally,” says
Boomers failing to save, but continuing to support adult children and aging parents
In 2007, when the original Money Across Generations® study was conducted, 44% of boomers claimed they were trying to grow their savings. Now only one in four (24%) say they’re putting away money for the future and just as many (24%) report simply trying to maintain what they have.
While boomers’ attitudes have changed, the level of support they’re providing family members has not. More than half (58%) report assisting their aging parents in some way, including helping them purchase groceries (22%) or pay medical (15%) and utility bills (14%).
When it comes to their children, boomers are even more generous. Most boomers surveyed (93%) say they have provided some kind of support to their adult children. A majority have helped them pay for college tuition or loans (71%) or helped them buy a car (53%). Many are also helping their kids pay for car and health insurance, as well as cover basic expenses like rent, utility and car payments.
Boomers fail to realize the impact on their retirement goals
Only 10% of boomers admit that helping their parents has slowed down their retirement savings, while one-third (34%) feel the same about the support they’ve provided their adult children.
So if they aren’t tapping into their retirement accounts, where are boomers coming up with the extra cash? Most say they’re relying on day-to-day spending or regular savings. Unfortunately, by diverting funds from their retirement savings, or by failing to take advantage of catch-up contributions, many boomers may fall short of their own goals.
Boomers are faced with difficult decisions when their family members require help. More than two-thirds (68%) say they would continue to contribute to their retirement savings instead of helping a child pay off credit card debt. But when it comes to health care for their elders, more than half (57%) say they would help a parent pay for long-term care insurance in lieu of contributing to their own retirement savings.
Boomers don’t regret providing support, but some questions linger
Despite uncertainty around meeting their own financial goals, a majority of boomers (86%) say that if they had to do it again, they would still support their adult children financially. Meanwhile, 20% express guilt about not being able to provide financial assistance to their adult children who currently need it.
They may be offering support willingly, but some boomers question their adult children’s ability to manage their own finances. Nearly half (47%) say they worry that their children do not understand what it takes financially to prepare for retirement, and 35% express concern that their children have not learned responsibility when it comes to money.
If asked, boomers’ children may partially blame their parents for their lack of financial savvy. More than half say that while growing up, their parents rarely or never talked to them about how they budgeted the family’s money (56%) or the importance of saving for retirement (52%). And while a majority say that their parents’ approach to spending and saving was fairly balanced, 30% feel their boomer parents’ attitude toward money was “live for today.” Only one-in-ten (11%) feel their parents conveyed an attitude that encouraged preparing for the unexpected.
“Family and personal values are important when making any kind of decision, but it can be difficult to prioritize our family members’ needs against our own,” says
Additional study findings, tips for engaging in family money conversations and commentary from our financial experts, are available on the Ameriprise newsroom. Consumers can also visit beginyourconversation.com to view our interactive guide and learn more about having family money conversations.
About the survey
The Money Across Generations IISM study was commissioned by
GfK is one of the world’s largest research companies, with more than 11,000 experts working to discover new insights into the way people live, think and shop, in over 100 markets, every day. GfK is constantly innovating and using the latest technologies and the smartest methodologies to give its clients the clearest understanding of the most important people in the world: their customers. In 2010, GfK’s sales amounted to
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|Source:||Business Wire, Inc.|