6/5/2012 1:05 PM ET|
Boomers giving away too much?
As they feel more pressure to support their children and aging parents, their own financial stress grows.
In a poignant scene in HBO's "Girls," the parents of a young 20-something living in New York inform her that they will no longer be giving her money every month. She will need to get a job and learn how to support herself. Hannah, the 20-something, protests. She later returns to her parents' hotel room to beg them to reconsider. Her mother refuses. She's worked hard, she tells her daughter, and as a college professor close to retirement, she deserves a comfortable retirement, along with the lake house she's always wanted.
As young adults struggle to find their footing in this economy, often turning to their parents for help, many baby boomer parents find themselves trapped between their own financial security and that of their children. A new survey from Ameriprise Financial found that more than half of boomers have allowed their grown children to move back home with them rent-free, despite the fact that their own financial stability has deteriorated over the past five years.
The survey reveals that many baby boomer parents are feeling simultaneous pressure to help their aging parents and struggling children, and to shore up their own savings and investments as retirement approaches. Many of them are also unable to work as long as they planned, which further hurts them financially, says Suzanna de Baca, vice president of wealth strategies at Ameriprise Financial. "Boomers are feeling significantly less confident that they can maintain their lifestyle and retire on time," she says.
These six emerging trends explain why baby boomers feel so financially squeezed:
1. Baby boomers feel financial pressure from all sides. In addition to their own investments being knocked down during the recession, many boomers were forced to retire earlier than planned due to job loss or health issues, which hurt their earnings. At the same time, they want to help their adult children, many of whom are struggling in today's job market, as well as their own parents.
"We're seeing boomers under a great deal of pressure to help other family members," de Baca says. In the survey, four in 10 boomers said it was important for them to help their children or grandchildren pay for college. Just over two in 10 said it was important for them to help provide financial security for their parents.
2. Boomers feel more pressure to support their adult children than they did five years ago. "Parents have always helped their kids with college and education, but now it seems to be increasing pretty significantly," de Baca says. "It's not just college, but prolonged support." More than half of boomers said they worry their children won't have enough financial resources to fund a financially secure retirement.
3. Boomers don't realize that the help they give to family members is hurting their own financial situation. Just 10% of boomers say the help they provide their parents is slowing down their own retirement savings, and one in 3 said the same about the support they give their grown children. But de Baca says the impact is probably far more widespread than that -- people often just don't realize it. "They're not necessarily taking money out of a qualified retirement account, but that's just one element of the complete retirement picture," she says. In fact, even inviting a child to live at home can have a negative effect on savings, she adds.
Five years ago, 44% of boomers said they were working on increasing their savings, while today, just one in 4 say they are doing so. Prioritizing their own retirement savings over other demands isn't easy; more than half of boomers say they would help a parent afford long-term care insurance before putting more money into their own retirement accounts.
4. Boomers are less ready for retirement than they were five years ago. Only one in three boomers reports being very confident in personal financial security. In 2007, 39% of boomers said they were very optimistic about their own financial futures. This year, just 17% of respondents said the same.
5. Families avoid awkward money conversations, which can compound financial strain. While boomers and their adult children alike say they are talking about money issues more than they were five years ago, many are still shying away from what they fear could be uncomfortable discussions. Half of boomers said they were taught growing up that money is something one doesn't talk about. "They also feel like it's none of their business -- 'I haven't talked to my aging parents, they're very private, I shouldn't bother them' . . . but the truth is, money is a family affair, and if you don't address it now, you'll have to address it later," de Baca says.
6. Parents think it's their own fault that their children don't know how to manage money. De Baca says that even though many parents think they missed their opportunity to impart money lessons when their children were younger, it's not too late to start. She urges parents to talk to their adult children about budgeting, planning and even retirement planning. For parents of younger children, she says, it's never too early to begin those conversations. More than half of adult children in the survey said they wished money had been discussed more openly when they were growing up.
The guilt baby boomer parents feel over not having imparted financial lessons earlier might motivate them to give their children more money -- which could further prevent those children from learning how to live on a budget.
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Jobs - they feel that they "deserve" a million to start with and yet they are not actively seeking employment because their chosen field is not hiring but too "proud" to accept what we boomers had to accept - entry level wages, perhaps not in our chosen field but at least we worked. Probably the most irritating was their perspective of the military - which I made sure they knew in class I was a veteran - and how that "lower class" lifestyle was not something they would ever consider. It's easier to move back in with mom and dad and "take a year off" because they've "worked so hard" in the last 4-5 years. Because they have attended college and are "independent," they believe they are now entitled, empowered and should be upper class in their own tiny minds where in reality their "boomer" parents that support them before, during and after college are humble, hard working members of the middle class.
And my grades - and BTW, I was working - were a "B+" and a "A" - and I worked just as hard for those grades as I do at work.
My wife and I are mid 50s. and very fortunate to own our own home. We both have decent paying full time jobs. We share our modest home with my wifes aging mother (82), our son (27) daugter in-law (25) baby grandson (18 months) Both my son and daughter are Iraqi War Veterans. She works full time, while he pursues his education with tuition help of the GI bill.
Has this taken a toll on our finances? hell yeah! But, I wouldn't want my kids struggling with a 2K+ a month mortgage like we have, or my Mother in-law being off on her own somewhere. The economy sucks, and we all need to look out for each other. Thats what families are about. If this means I will have a little less in the future..well, so be it. I won't regret helping my own. I don't ever want to be a burden on my kids, but I know that by supporting each other now, we will be there for each other always. This IS the American way. Our parents and grandparents made sacrafices, So now its my turn. No regrets! And. having my beautiful Grandson growing up in my home, is Gods blessing, for sure!
My parents taught me to work at an early age. I was 8 when my father took me to the first job. I would sweep out warehouses and a sawmill after hours for $1 and hour. They paid my father not me. He would give me half and take the other half for the house expenses. In those days there were no government handout programs. If you didn't work you went hungry and homeless.
As long as I lived in my parents house 50% of what I earned went to the house fund. I was working full time by age 15. I finished high school with high marks, lettered in football and wrestling, completed college several years later after a stint in the army, worked hard and retired at age 46.
You might think my parents sound harsh but they were teaching me to work and be independently wealthy. You don't have to have super rich amounts of money to be independently wealthy you just have to have enough to live on with out borrowing for anything other the the big ticket items like a house.
Needless to say I have told my daughter that when she is and adult she can live with us as long as she wants to and works to help support the place.
As a Gen X'er, I look around at my generation and notice how ill-equipped they are to be independent. At no point did their parent(s) push them out of the nest and watched to see if they flew or fell. No, rather than bear the thought of their baby falling to the floor (and picking themselves up and trying again)... they'd rather just keep them in the nest, safe and sound.
When I was 18 years old, I was pretty much kicked out of the house. I spent 2 years essentially homeless living out of my car. I went hungry many nights, but in the end it was that experience that drove me to put my foot through the open door that was college and better myself. 12 years later, I make more money than anybody I personally know. Watching the friends I grew up envying (because they seemed to get everything they wanted), I look at them now and wonder why the hell aren't they successful? They had every advantage in the world, yet not a single one of them brings home even half of what I do. My mom was a single mom who made a few poor choices prior to having me, but spent the years raising me breaking her back to provide me with what I needed (and the occassional surprise here and there with what I wanted too. I remember being 10 and waking up one night to fight the action figure I had saved up for sitting on my nightstand - it wasn't in any of the stores in our area. Apparently, she drove 3 hours out to who knows where to get it for me.) Regardless, I saw it. I saw how hard she worked and how little she got for it. I saw the effects of mistakes she had made and made it a point to not repeat them.
After falling for a bit, I finally flew.
Now, just 30 years old... I'm helping her out. Putting her on track to have the kind of retirement she deserves, while setting up my own comfortably. My fiance doesn't have to work (if she wants to, great - if not, great!) Recession, resmeshun.
Life is what you make of it. If it sucks, it's generally because you are paying for mistakes you've made. Opportunities you've missed. At the end of the day, it comes down to your choices and how you've been taught to make them.
I fear a lot of baby boomers spent too much time trying to keep their kids in the safety of the nest and forgot to teach them how to fly. At some point, they are going to need to fly or fall without you. It may just be me, but it's about confidence. Some parents never had confidence that their kids could truly do it and/or never taught their kids to be confident that they could do it and now that it's time to do it... well, I guess we all know where this sentence is going.
Most boomers don't want to admit what I'm about to tell you.
Boomers have done a poor job in many areas.
We keep reelecting the same politutions, & do a terrible job selecting new ones. We have aloud our country to get horribly in debt, while we freely hand out billions of dollars in foreign aid (money we don't really have). In doing so we won't even give a toaster to a poor woman in the getteho's. Many Americans will step over a homeless person just to give money to the poor in another country. White people will hurry up to Africa & adopt a black child there instead of one here at home. Almost every city, county & state...not to mention our federal government...spends far more $ than they have. Yes, no wonder our children think they have entitlements.
The economy tanked and most of us are feeling the repercussions. We can point our fingers to a million different reasons, but the reality is we have to live on less.
As a 50-ish manager of people in their 20's and 30's I am appalled at the level of laziness, self-centeredness and entitlement of many of my employees. They insist on new cars, I-phones, blah, blah, blah despite having little means to pay for it all. They come up with every reason not to come to work and then get angry at their parents, their employer and the world when they don't have enough money to keep them in the lifestyle in which they've become accustomed or think they should live. Are you kidding?
The parents who taught their kids a positive work ethic, that life isn't always fair and empathy skills should be commended and I praise your efforts despite struggling financially. But for the parents who have allowed their kids to leech off them....well, you kinda asked for it.
Morning Post for example..................
I am 27 and would be too ashamed to take money from my Mom I don't intend to pay back! She was on her own making a living at 14 and I have been on my own since 17. She has worked very hard for every thing she has now.
If you have to live with your parents, pay them rent or do a lot of house work. Only ask for money if you need it for groceries and can't get a job. Shame on any kid over the age of 18 and not in college or working leaching off their parents!
When interest rates are kept artificially low to help those not responsible it hurts "Everyone" that has been responsible or fortunate to save. It’s the governments’ way of stealing from the responsible and give to the irresponsible. "Wealth distribution" Wake up America!
Wow... ouch. My hubby and I are boomers. The 5 grown children and 9 grandchildren we have between us all need, need, need, every month.
We don't have aging parent issues, but we do have aging disabled sibling issues, mine is a brother, his is a sister. My brother lived with me for about 2 years back in the 1980s and may be coming to live with us again in the near future. My husband's sister lived with us for 11 months, right after my husband and I married in 2004.
We get emergency phone calls every few days it seems because somebody is out of food, out of gas, can't pay rent and being evicted, can't buy medicine, got a ticket and can't pay that, car repairs are needed, car inspections needed, car repairs to pass car inspections, school clothes and supplies and braces are desperately needed for the teen grandchildren... everybody needs our help and we can only do so much with the little we have! Oh, and then there are the 2 divorced ones who have in the recent past been facing jail because they lost their good-paying jobs and couldn't pay court-ordered child support, nor afford the lawyers to appeal the amount they must pay, which was based on earnings they no longer get.
My husband is a disabled Vietnam Veteran, and I was a high school drop-out married at 16 mother at 18 and mostly a stay-at-home mom due to my career military ex-husband's frequent transfers. Here we are facing old age and our house needs a new roof and our plumbing is shot, but we keep putting everyone else ahead of our own needs because ~ like the article says ~ we feel guilty that we didn't do a better job of teaching and prepareing our children for adulthood! I keep saying that I forgot to teach my kids Basic Life Skills 101!
I think boomers started out well - plentiful manufacturing jobs, good paychecks and benefits allowed them to become very generous. I know many of them thought they'd go on Social Security with a little part-time job on the side, but that's not happening. Employers no longer hire older people, even part-time. That being the case, boomers are staying in their regular jobs longer. Since I'm a boomer, I can tell you that boomers are totally, completely generous, even with limited means. Of course, family members have come to expect the boomers to continue to be generous, no matter what. A close friend moved to FL and then always paid her NJ daughter's air fare to come for a visit. The daughter had a very good job, but mom always paid the airfare anyway. When mom and dad ended up on welfare, the daughter with the good job still expected them to pay her airfare. I think that about says it all regarding expectations.
truly sad thing is my mom got kicked to the curb as well..she's 70 and living on a fixed income of about 15K/yr..and now that I'm out of the job I've been doing for 8..with NOTHING to show for it I'm not in the best position to help her
..but yet..you pick yourself and dust yourself off..I've invested every scrap of money I can save into starting my OWN company and after 2 HARD years it's starting to pay off
..HOPEFULLY in time to provide for my MOTHER before she dies..IF this can come together..it will be me taking care of her..and I wouldn't have it any other way
..as for my father I hope he dies alone and penniless
..bad people DO win in this world..never forget that
Wake up people. The eventual collapse and devaluation of our dollar was a planned ponsie scheme implemented by the Fedeal Reserve Banking Cartel long ago. It is not over yet, and they have done this in many other countries as well.
What a great plan, Inflation(devaluation of the dollar) keeps goods decreasing in quality, yet costing us more and more, while we are paying with money, worth less and less. That explains the shrinking middle class and the huge division between the rich and poor, here and abroad.
Look at what we have done to ourselves and our childrens future, by following and supporting the corporate leaders who have infiltrated and rule our government. We have endorsed the waste of recources, the pollution of our world, the poisoning of ourselves and children, and the death of millions of innocent men, women and children, due to wars that our fought for hidden corporate agendas.
Corporate rule is a fascist government. They care nothing about governing fairly. They only care about the bottom line, taking all your money, your homes, belongings and endenturing you in to dependence on them for your survival.
Nothing personal, just business. Now go back to voting for the "Job Makers" and keep the global crisis going, where they have our citizens waving their corporate flag for profit for them for hidden agendas while invading other countries and creating jobs. For the military industrial complex that is. Our only growing job market is civillian military contractors. NOBODY SHOULD PROFIT FROM WAR!
Until all of you realize that our country fell victim to a succesful coupe a long time ago, by the invisable corporate leaders of the Federal Reserve bank(who we are still not allowed to know by names) and the military industrial complex(including CIA) we will keep being led to our own demise. Intentionally, and without a doubt.
Just look at the mess following our leaders has gotten us. Stop blaming our people. Stop fighting with each other and pointing fingers at others for what we are all to blame for. We allow them to double talk, be incompetent, be unaccountable, insider trade, enact unconstitutional laws and wars, bailout crooked banks, and ignore the needs and wants of all our citizens as well as our environment. You think a real Patriot would wave a flag for that?
I am not a young man, a boomer in fact. It shames us all to see where our leaders have taken us.
Stop believing in leaders and become one, Research for yourself. The deception was very well planned and enacted. Pull the blinders off and stop thinking our leaders will lead us anywhere but where their corporate sponsors what us to be. Broke, in their debt, and dependent on them.
Until we have leaders who are not in it for profit, our freedom, liberty, and constitution will only suffer more. Until you take profit out of governing, there will be no governing, only their profiting.
I am not a conspiracy theorist. Their own actions have convinced me that without a doubt, we have been lied to, we have been decieved, and they conspired to profit off of their unaccountable control. We need real leadership. Where are the sane adults? The real Patriots who are willing to speak out and change the course they have spelled out for our children??
For Gods sake people, read, research, open your eyes, then you will see what has clearly happened to us all. The greatest crime against humanity, is poverty. And that's where we are all headed, they want it all.
It saddens me to see everyone putting blame on everyone else but who is actually responsible for our monetary crisis. The Federal Reserve Banking Cartel and the government leaders who allowed them to take us off the gold standard. They are the ones profiting off our demise. Any crime can be solved, if you follow the money trail. It is a crime of treason against our citizens. A cheap trick, a ponsie scheme. Designed unfairly to benifit those with the most and drain the ones with the least.
No paper money system has ever been successful without a gold standard. Our leaders were aware of this when they took us off of it. It was designed to fail, divide the rich and poor, and eventually be replaced by a new worthless monopoly money when it collapses. Consider it as casino tokens.
We cannot all be winners in the USA casino. They unfairly devised a way to slowly drain the value out of our currency, while accumulating obscene profits.
They laugh at us for pointing fingers, blaming each other. Just as a Casino laughs at people who are bad at math and yet still play their games designed to steal most of wealth with calculated odds against players. They allow just enough winners to inspire others to play.
Wake up kids, Do you feel lucky?
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