Ameriprise: Boomers Put Families’ Financial Needs First
Baby Boomers-those born between 1946 and 1965-put their family members' financial needs ahead of their own despite escalating insecurity about their own financial security, according to a study released Tuesday by Minneapolis-based Ameriprise Financial.
A whopping 93 percent of the Baby Boomers who participated in the study-Money Across Generations II-said they provide financial assistance to their adult children. More than half of the respondents have allowed their adult children to move back home and live rent-free, 71 percent have helped pay for college tuition and loans, and 53 percent have helped their grown children to buy a car. Many are also helping their kids pay for car and health insurance and cover basic expenses-like rent and utilities.
The study also found that about 58 percent of Boomers financially assist their aging parents by doing things like helping them buy groceries and paying their medical and utility bills.
Meanwhile, only 24 percent of the Baby Boomers who participated in the study said they were putting away money for the future-and just as many said they were simply trying to maintain what they have. In 2007, when the first Money Across Generations study was conducted, 44 percent were setting aside funds for later in life.
The study found that Baby Boomers typically don't realize the negative impact that their actions are having on their own retirement goals. Only 10 percent of Boomers admit that helping their parents has slowed down their retirement savings, while 34 percent feel the same about the support they have provided to their adult children.
Although many Baby Boomers have willingly provided that support, 47 percent say they worry that their children do not understand what it takes financially to prepare for retirement, and more than a third are concerned that their children have not learned fiscal responsibility.
Despite uncertainty about meeting their own financial goals, 86 percent of the study respondents said that if they had to do it over again, they would still support their adult children financially.
“Boomers are feeling the pressure financially and emotionally,” Suzanna de Baca, vice president of wealth strategies at Ameriprise Financial, said in a statement. “In many cases they're sandwiched between children who are unemployed or struggling to pay down their student loan debt and aging parents who are facing complex health and financial issues. At the same time, they're trying to prepare for their own retirement. The demands on their time and money can feel endless.”
The study was commissioned by Ameriprise Financial and conducted in December by research firm GfK. It surveyed 1,006 Baby Boomers with $100,000 or more in investable assets, 300 parents of Baby Boomers, and 300 adult children of Baby Boomers.