Parents Helping their Adult Children May be Hurting their own Retirement
December 16, 2014
Researchers recently found that about 60 percent of parents in the United States were giving some form of financial support to their adult children, and they say this may undermine parents' readiness for retirement. In research findings, Millennials went through the most serious parts of the economic downturn. Although they are the most educated generation in the history of the United States, about 40 percent are unemployed. In addition to this, more members of this generation are under-employed. Experts said that parents of Millennials were providing substantial portions of their adult children's income at the time during their lives when they should be making retirement savings their top priority.
Experts said that parents are more likely to help their adult children pay for rent, college expenses, mobile phones and entertainment. This includes sporting events, concerts, movies and similar activities. Nearly 40 percent of American households of older parents who reported having adult children said they did not provide any form of financial assistance for their children. Researchers also said that about 60 percent of households in the United States with adult children had one or more of those children still living at home. Of the American households with adult children between the ages of 18 and 22, about 75 percent reported having at least one of those children still living at home.
Less than 50 percent of parents with adult children have provided financial support during the past year and had it result in a loss of retirement savings or a severe dent in their bank accounts. Experts were concerned about this finding, and they said that parents may not realize the effects their financial help for adult children will have on their retirement readiness. Prior research showed that over 50 percent of adults who were nearing retirement age and had adult children owned less than $100,000 worth of financial assets. They pointed out that even $100,000 would not be enough to last between 20 and 30 years of retirement. The survey revealing these findings included more than 1,000 Americans in July of 2014.
It is important for adults of all ages to be planning for retirement. Experts say that as time passes these days, statistics show that many age groups are far from being ready for retirement given their age and current financial status. To learn more about saving for retirement and the various options available, discuss concerns with an agent.