What’s happening to all that retirement
money people are supposed to be saving?
It’s probably going to support,
or help support, an older or younger family member.
That’s according to a Gallup poll,
the first quarter Wells Fargo/Gallup Investor and Retirement Optimism Index
survey, which finds that 32 percent of investors are providing financial
support to an adult family member—a parent, a grown child, or perhaps even
both.
And, not surprisingly, 61 percent
of those say that it’s making it tough to save for their own retirement.
You have an extra $1,000 -- do
you pay extra to student loans or invest it in retirement?
Among retired investors, the
number is a bit lower, at 25 percent, than it is among those still actively
working (35 percent). While 22 percent of retired investors say they’re helping
an adult child, 2 percent say they’re helping a parent and 1 percent say
they’re helping both, 75 percent say they aren’t providing financial help to
such family members.
But among those not yet retired,
just 65 percent say they’re not helping to support family members; 24 percent
are helping one or more adult children, 8 percent are bailing out a parent and
3 percent are helping both generations.
Overall, the poll finds that 46
percent of investors who have one or more grown children are providing them
with financial support, while 14 percent of investors with a living parent are
doing the same.
While the poll did not ask how
much financial support respondents are providing, or how the money is being
used—such as for college, in the case of adult children—a 2013 Gallup
study found that the “boomerang” or “Peter Pan” phenomenon of young adults
returning to or remaining in their parents’ home is all too real for many
families.
That survey found that 14 percent
of adults in their immediate post-college years (aged 24–34) indicated they
were living at home with their parents.
This supporting of other
generations, however, is taking a toll on retirement preparedness. A little
more than six in 10 investors who are providing money to older or younger
generations say it hinders their retirement savings a lot (11 percent), a moderate
amount (17 percent) or a little (33 percent).
That amounts to 20 percent of all
investors who are negatively affected by the financial support they provide.
Click
here for the original article from Benefits Pro.