Are baby boomers’ putting their retirement security in peril? According to a new Ameriprise Financial survey, only one in four baby boomers are saving for their retirement. What are they doing with money that could carry them through their senior years? More than half said they are helping their parents pay for daily expenses, while 93 percent said they are providing their adult children with financial support.
The survey of 1,006 baby boomers with $100,000 or more in investable assets, 300 of their adult children, and 300 of their parents, found that only 24 percent of boomers are saving for retirement, compared to 44 percent five years ago.
And what a difference a half decade makes. The economy has not yet fully recovered from the 2008 economic collapse. Unemployment is above 8 percent, compared to 4.5 percent in 2007, and average home prices have dropped one-third below their 2006 peak, the report notes. Five years ago, nearly two-thirds of baby boomers (64 percent) reported feeling very or somewhat optimistic about the country’s financial future. Today, less than half (49 percent) of those surveyed share this optimism, with 57 percent saying they are less optimistic since the financial crisis.
Only 16 percent said they would be able to preserve their wealth to leave to their children vs. 28 percent five years ago. Assure their parents a financially secure life? That too has declined from 33 percent in 2007 to 19 percent. Only 24 percent said they could help their children or grandchildren pay for their education, compared with 39 percent five years ago.
These concerns are echoed in a first quarter wealth level study Millionaire Corner conducted in households with a net worth between $100,000 and $1 million (not including primary residence). Sixty-seven percent of boomers ages 55-64 said they are concerned about the their children or grandchildren’s financial future. Fifty-seven percent worry about the responsibility of caring for their aging parents. Financing their children’s education was of more concern to younger boomers in the 45-54 age group (65 percent).
It would seem that boomers need to teach their children well about finances, and the Ameriprise report finds that 50 percent of boomers said they regularly discuss money matters with their families (up from 39 percent in 2007). But 27 percent of boomers say they rarely or ever discuss retirement. Four in 10 admit that they haven’t discussed their current financial situation with their children. Why? For 27 percent, they just haven’t gotten around to it. These findings, the report said, have remained relatively unchanged since 2007.
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.