Study offers a pre- and post-recession comparison of three generations of Americans to illustrate how their relationships with money – and each other – have changed.
In the spring of 2007, when the first Money Across Generations® study was conducted, the Dow Jones industrial average had just broken 13,000 for the first time and the U.S. unemployment rate rested at 4.5%.
“Five years later, the financial and emotional scars of the recession continue to linger, casting a cloud of uncertainty over generations of Americans,” says
Boomers’ optimism and confidence in reaching financial goals has plummeted
The downturn has had an especially significant impact on baby boomers, a generation that was once viewed as the embodiment of optimism and affluence. Today, about half (49%) of boomers say they are optimistic about the financial future of
This skepticism has impacted boomers’ confidence in reaching specific financial goals, including those they are most likely to rate as very important: assuring a secure life for themselves and their family (80% very important) and having enough money to continue their lifestyle after they retire (71%).
The number of boomers who report feeling very confident about their ability to achieve the following goals has declined significantly since 2007:
- Assure a financially secure future for themselves and their family (33% vs. 51%)
- Continue their current lifestyle in retirement (27% vs. 44%)
- Help their children or grandchildren pay for their education (24% vs. 29%)
- Assure a financially secure life for their parents (19% vs. 33%)
- Support a charity or cause that’s important to them (18% vs. 29%)
- Preserve wealth to leave to their children (16% vs. 28%)
Financial fears are echoed by boomers’ children and parents
Boomers’ family members are also concerned about them: 55% of their adult children and 42% of their parents worry about their boomer relatives’ ability to achieve a financially secure retirement.
These fears are not isolated to the boomer generation. Despite their relative youth, boomers’ children (primarily members of Gen Y and Gen X) also report significant declines in their perceived ability to reach key financial goals. The number of those who say they are very confident they will be able to reach the following goals has dropped dramatically:
- Help their children pay for their education (25% vs. 49%)
- Assure a financially secure life for themselves and their family (37% vs. 58%)
- Be able to continue their lifestyle after they retire (23% vs. 45%)
Boomers also express concerns regarding their adult children. More than half of boomers (55%) say they worry that their children will not have enough financial resources to achieve a secure retirement. They are also concerned that younger generations do not understand what it takes to prepare for retirement (47%) and that their children’s financial situation will prohibit them from having the same opportunities they’ve enjoyed (45%).
Boomers’ parents are also feeling financial pressure, but to a slightly lesser degree. The largest decline is seen in the number who believe they will be able to support a charity or cause that’s important to them (18% vs. 34%).
Families are discussing money matters, but conversations are missing the mark
Boomers are much more likely to report that they regularly discuss money matters with their family than they were in 2007 (50% vs. 39%), but these conversations are only scratching the surface. Four-in-ten boomers (41%) admit they haven’t adequately discussed their current financial situation with their children and one-quarter (27%) say they rarely or never discuss retirement. Perhaps even more concerning, 37% of their parents do not feel they’ve adequately discussed their financial situation with their boomer children – a number that has remained relatively unchanged since 2007 despite the turmoil caused by the recession and the fact that both generations have aged five years.
Americans across the three generations surveyed cite health care costs as one of the most significant risks to their retirement, yet the topic isn’t being regularly discussed by most families. Boomers (40%) are the most likely to say they regularly engage in conversations about this issue, followed by their parents (39%) and children (29%).
“It is absolutely essential that families engage in detailed discussions about money, including how their current financial situation aligns with their needs and goals,” says
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.|