GenBetween

Baby Boomers provide financial assistance across generations

by Elizabeth on November 30th, 2007

A study reported in The Mature Market.com looks at how Baby Boomers in the Sandwich Generation are financially generous to both aging parents and children, possibly at the expense of their own financial security:

Boomers say they are using non-retirement related funds to finance their assistance across generations, but few believe their generosity impacts their ability to save for retirement: While half indicate using their day-to-day spending money to assist their adult children, four in 10 boomers draw from their regular savings, and one in six even resorts to taking a loan.

* Only six percent admit to pulling money from their retirement savings to help
their adult children.

* While only 9 percent of boomers believe assisting their parents has hurt their
retirement savings, twice as many (29 percent) believe assisting their adult
children has slowed their savings progress.

“In generously providing financial support to their families, boomers seem to know that they shouldn’t dip into their retirement savings. Yet, they don’t see how tapping day-to-day spending money impacts their ability to save,” said Craig Brimhall, vice president of retirement wealth strategies, Ameriprise Financial. “The issue may be how they distinguish between their retirement and other savings. Many boomers appear to be assuming that if money isn’t coming from an IRA or 401(k), it’s not going to affect their retirement.”

Looks like being generous to a fault won’t be a problem for me, you have to have something to be generous with, for starters.

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POSTED IN: Baby Boomers, Research, Retirement