More and more boomers are being too generous to family members, doling out wads of money and jeopardizing their own retirement security, according to a newly released study by Merrill Lynch Wealth Management and Age Wave.
The study, “Family & Retirement: The Elephant in the Room” conducted in August by Merrill in partnership with Ken Dychtwald’s Age Wave, found that during the last five years, three out of five (62%) Americans age 50 and older have provided financial assistance to members of their family, including adult children, parents, grandchildren, siblings or other relatives.
On average, the study found that the financial assistance provided to family members during the last five years was nearly $15,000—and significantly more among the nation’s wealthiest families.
While the support may have gone to help relatives meet a one-time need or provide ongoing assistance over the course of many years, it was often given without expecting anything in return, the study notes. However, the study warns that the vast majority of people age 50+ (88%) have not factored such support for family into their financial planning.
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Andy Sieg, head of Global Wealth and Retirement Solutions for Bank of America Merrill Lynch, said in releasing the study that “Such admirable willingness to assist family members should not place one’s own long-term financial security in jeopardy, and can be a hidden risk to retirement that must be considered and planned for.”