Baby boomers are putting their retirements at risk by spending too much on their adult children, according to a new study by Ameriprise Financial. The study looked at the various ways people age 47 to 64 are financially assisting aging parents, adult children, and saving for retirement -- and how it's hurting their savings goals: Only 24 percent of boomers said they are saving for retirement, compared to 44 percent in 2007.
"It’s really admirable to provide support to parents and adult children," said Suzanna de Baca, Vice President of Wealth Strategies at Ameriprise Financial. But post 50s need to consider a specific level of support and look at whether they are funding wants or needs. "Have an open conversations about what you really can do," she added. "Take parent-child relationship out of it. Address the needs versus wants, and the expectations in terms of amounts and timelines."
Ameriprise Financial conducted the survey questioning 1,006 baby boomers with $100,000 or more in investable assets, 300 of their adult children, and 300 of their parents.
More than half of respondents have adult children living at home without paying rent. Moreover, the sandwich generation is also supporting aging parents: More than half of boomers surveyed provide support. Check out the slideshow below for a look at how post 50s are supporting family financially.
More than half of boomers have their adult children living at home, at no cost.
Nearly a quarter of boomers claim to be saving for the future, down from 44 percent in 2007.
Assisting Aging Parents
More than half of boomers are providing financial assistance to their aging parents, covering basic needs such as: grocery bills, medical bills, and utility bills. Additionally, 10 percent feel that helping their parents has slowed their retirement savings.
Assisting Adult Children
The majority of boomers said they have provided support to their adult children, as 71 percent helped pay for college tuition or loans and 53 percent helped their children purchase a vehicle. More than one third felt that supporting their adult children has damaged their retirement savings.
Assistance Vs. Retirement Contribution
More than half of boomers said they would choose to contribute to their retirement savings instead of helping their adult child pay off credit card debt. The study showed more than half would help a parent pay for long-term care insurance instead of contributing to their own retirement savings.
Nearly half of boomers worry that their adult children do not know how to prepare financially for retirement. More than one third expressed feelings that their adult children lack financial responsibility.
The majority of boomers said they would still support their adult children financially if they had to do it over, while 20 percent felt guilt for being unable to help.
Children Of Boomers
More than half of children of boomers said while growing up, their parents rarely or never talked to them about how to budget. Additionally, 52 percent said their parents never relayed the importance of saving for retirement.