Americans’ confidence in achieving a secure retirement and their optimism about the country’s financial future have declined significantly during the past five years, according to a new report.
Ameriprise Financial, Minneapolis, Minn., (NYSE:AMP), published this finding in a summary of results from a study (“Money Across Generations II”) that explores how the changing financial needs and attitudes of each of three generations— baby boomers, their adult children and their aging parents—have altered their relationship with money and with each other.
The report reveals that about half (49%) of boomers say they are optimistic about the financial future of the United States, down from two-thirds (64%) of those surveyed for an earlier iteration of the study published in 2007. Only 17% of boomers say they “very optimistic” about their own financial future— a significant decline from 2007 when 39% reported the same.
This skepticism has impacted boomers’ confidence in reaching specific financial goals, including those they are most likely to rate as very important: assuring a secure life for themselves and their family (80% very important) and having enough money to continue their lifestyle after they retire (71%), the report says.
The number of boomers who report feeling very confident about their ability to achieve the following goals has declined significantly since 2007:
Assure a financially secure future for themselves and their family (33% vs. 51%)
Continue their current lifestyle in retirement (27% vs. 44%).
Help their children or grandchildren pay for their education (24% vs. 29%).
Assure a financially secure life for their parents (19% vs. 33%).
Support a charity or cause that’s important to them (18% vs. 29%).
Preserve wealth to leave to their children (16% vs. 28%).
The study adds that boomers’ family members are also concerned about them: 55% of their adult children and 42% of their parents worry about their boomer relatives’ ability to achieve a financially secure retirement.
The survey also notes a significant decline in the perceived ability among boomer children to reach key financial goals. The number of those who say they are very confident they will be able to reach the following goals has dropped dramatically:
Help their children pay for their education (25% vs. 49%).
Assure a financially secure life for themselves and their family (37% vs. 58%).
Be able to continue their lifestyle after they retire (23% vs. 45%).
Boomers also express concerns regarding their adult children. More than half of boomers (55%) say they worry that their children will not have enough financial resources to achieve a secure retirement. They are also concerned that younger generations do not understand what is required to prepare for retirement (47%) and that their children’s financial situation will prohibit them from having the same opportunities they’ve enjoyed (45%).
Boomers’ parents are also feeling financial pressure, but to a lesser degree. The largest decline is seen in the number who believe they will be able to support a charity or cause that’s important to them (18% vs. 34%).
Read the full report here.