Americans generous natures may be putting their retirements at risk. Half of pre-retirees age 50 and up say they would make major sacrifices that could affect their own retirement to help family members, finds a recent survey.
Among these pre-retirees, 60% would retire later, 40% would return to work after retiring and 36% say they would accept a less comfortable retirement lifestyle to help family financially.
Given the challenging economic climate during the past several years, its not surprising that so many Americans have extended financial support to their loved ones, said Andy Sieg, head of global wealth and retirement solutions for Bank of America Merrill Lynch, which conducted the survey of 5,400 Americans. However, such admirable willingness to assist family members should not place ones own long-term financial security in jeopardy, and can be a hidden risk to retirement that must be considered and planned for.
The study also found a significant lack of proactive discussion between family members on financial topics.
Seventy percent of adult children age 25+ have not had a discussion with parents about their retirement and other issues related to aging. And more than half (56 percent) of parents age 50+ say they have not discussed any important financial issues such as a will, health directive, inheritance plans and where they plan to live in retirement with their adult children. Furthermore, just one in four (24 percent) siblings age 50+ have discussed how their parents will be financially provided for, or cared for, as they get older.
Other findings from the survey include:
- One-in-five parents age 50+ have at least one boomerang adult child who has moved back in with them.
- More than two-thirds (68%) of parents age 50+ have provided some form of financial support to their adult children during the past five years 36% did so without knowing how their money was being used.
- Among those parents who were aware of how their money was being spent, 15% say it was given to help their adult children with health care expenses.
- Less than one-in-four (23%) of adults age 50+ say they would be prepared financially if they or their spouse were forced to retire early because of a health problem.
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