Study: Boomerang Children Hurt Boomers Retirement Prospects

This important study shows that the Baby Boomer generation is setting yet another milestone. No other generation in history has spent so much money on its kids – grown kids, that is! At Wealth Management Group, we understand that talking with your children about money may be one of the most difficult conversations you will have with your kids. The other is to say “no” to your child when you simply can’t afford to hand over money. The question many of our clients ask: Where do I draw the line between supporting my adult children and derailing my own financial future? If you are like many Baby Boomers today and feeling like the family bank, talk to us. We understand the family dynamics among today's pre-retirees and retirees. We'll give you insight and financial guidance to help your children be financially independent and give you peace of mind to live the life you’ve always imagined.

Study: Boomerang Children Hurt Boomers Retirement Prospects

                                                                                                                     By Mike Bushnell

Baby Boomers who have yet to cut the financial cord with their adult children are increasingly finding that tether to be more like an anchor keeping them from reaching retirement.

According to a new study of Baby Boomers by Hearts & Wallets, only 21% of Baby Boomers who still support adult children are retired, compared with 52% of Boomer households whose adult children are financially independent.

All told, 65% of Boomers have children, and nearly one-third of them still financially support their children, be they adults or minors. About one-third of the 47.4 million Boomer households in America still supports children, a total that is divided nearly evenly between those over age 18 and those under 18. Not surprisingly, just 17% of Boomers with dependent minor children are retired.

While both retired Boomers and those with minor children worry more about the future, listing “outliving my money” as one of their top life concerns, Boomers with adult dependents have more immediate concerns. More than half of adult-supporting Boomers said “saving enough for retirement” is their top concern, while 38% report moderate-to-high financial anxiety. They also happen to report the lowest levels of financial advice-seeking, with just 24% reporting having ever talked to a financial professional about their future.

“Providing financial support to anyone, but especially to an adult child, can have tremendous consequences for retirement and estate planning,” said Chris Brown, a principal at Hearts & Wallets. “Financial services firms would be wise to examine their client bases for this trait and adjust product and service offerings to meet the needs of the nearly [48] million Boomer households.”

The survey, “Dissecting the Baby Boomers: How a Parental and Financial Support Status Segmentation Reveals Key Differences in Finances, Attitudes and Behaviors,” was conducted using data from the Hearts & Wallets Investor Quant Database, which is comprised of more than 30,000 household interviews conducted over the past five years.

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