Baby Boomers Sacrifice Retirement for Kids—Again

Only 10% of boomers admit that helping their parents has slowed down their retirement savings, while one-third (34%) feel the same about the support they’ve provided their adult children.

So if they aren’t tapping into their retirement accounts, where are boomers coming up with the extra cash? Most say they’re relying on day-to-day spending or regular savings. Unfortunately, by diverting funds from their retirement savings or by failing to take advantage of catch-up contributions, many boomers may fall short of their own goals.

Boomers are faced with difficult decisions when their family members require help. More than two-thirds (68%) say they would continue to contribute to their retirement savings instead of helping a child pay off credit card debt. But when it comes to health care for their elders, more than half (57%) say they would help a parent pay for long-term care insurance in lieu of contributing to their own retirement savings.

Despite uncertainty around meeting their own financial goals, a majority of boomers (86%) say that if they had to do it again, they would still support their adult children financially. Meanwhile, 20% express guilt about not being able to provide financial assistance to their adult children who currently need it.

They may be offering support willingly, but some boomers question their adult children’s ability to manage their own finances. Nearly half (47%) say they worry that their children do not understand what it takes financially to prepare for retirement, and 35% express concern that their children have not learned responsibility when it comes to money.

If asked, boomers’ children may partially blame their parents for their lack of financial savvy. More than half say that while growing up, their parents rarely or never talked to them about how they budgeted the family’s money (56%) or the importance of saving for retirement (52%). And while a majority say that their parents’ approach to spending and saving was fairly balanced, 30% feel their boomer parents’ attitude toward money was “live for today.” Only one in 10 (11%) feel their parents conveyed an attitude that encouraged preparing for the unexpected.

“Family and personal values are important when making any kind of decision, but it can be difficult to prioritize our family members’ needs against our own,” de Baca says. “Unfortunately, unconditional financial support can threaten or even sabotage retirement goals and security. It’s important to have open conversations with your family about your current financial situation and evaluate your ability to meet your own goals before offering any kind of support.”