How much support baby boomers provide their adult children is a key factor in their retirement preparedness, a report released Wednesday from Hearts & Wallets found. The “Dissecting the Baby Boomers” report found that while over a third of boomers overall are fully retired, only 21% of those who are financially supporting adult children are. Fifty-two percent of boomer households who have children they don’t support are fully retired.
Over two-thirds of boomers have kids, the report found, and about a third are supporting their children, whether they are adults or minors. Nearly 8 million boomer households, which together control almost $4 trillion in assets, are financially supporting adult children, the report found.
The study participants were born between 1946 and 1964. They were between ages 50 and 80 when the study was fielded in the summer of 2014.
The report divided respondents into five cohorts, the two largest of which are not financially responsible for anyone else: Almost a third of boomers have financially independent adult children, and 35% don’t have anyone they’re financially responsible for. The smallest cohort was boomers who are supporting extended family members or friends, but no adult children, at 4%. Thirteen percent of respondents are supporting minor children, and 17% are supporting adult children, but have no other minor children to care for.
Most cohorts’ biggest retirement fear is outliving their money, but those supporting adult children are most worried about simply saving enough to begin with.
“Being a parent and supporting others affect what people worry about and their savings and investment goals,” Laura Varas, Hearts & Wallets partner and co-founder, said in a statement. “For those supporting others, it’s important to focus on their own needs as well as everyone else.”
The report found that boomers who are supporting their adult children are 25% more likely to suffer greater financial stress. They’re also among the least likely to use a financial advisor. More than half said they were uncomfortable accepting volatility for a higher return.
“Boomers who support someone financially have very different concerns than those who don’t,” Chris Brown, Hearts & Wallets partner and co-founder, said. “Likewise, goals differ for parents who support adult kids versus those with minor children. Parents supporting adult children wonder when – or if – their kids will ever become independent. They worry about saving enough to have freedom to enjoy life as they age. Boomers with minor kids are more upbeat about managing money. This segment is the most receptive to working with financial professionals and the most technologically savvy.”