Monday, November 18, 2013

New Retirement Survey from Merrill Lynch & Age Wave

Released today is a new study from Merrill Lynch in partnership with Age Wave, titled Family & Retirement: The Elephant in the Room This survey was done in August of 2013 and is the second in a series.  This second study identified three trends: (1) Parenthood goes on and on, so parents find themselves helping adult children; (2) with longevity comes the need for ongoing, or increasing support, regardless of type; and (3) many are not prepared financially for retirement. (p. 4). 

Three topics are discussed in depth in the report. The first, the family member who is the "family bank" (pgs. 6-11), offers the following statistics:  slightly over 60% of those 50 and over give financial assists to a family member, whether one-time or ongoing and slightly over 50% consider a family member to be the "bank". Here's a certain irony, the "banker" typically is the one "who saved and invested responsibly...the more financially responsible...the more likely the other family members will consider [that person] to be the ... Bank." (see pg. 6 for the charts and accompanying information).  The report also offers an interesting discussion of the family structure and its impact on retirement savings.

The second covers the 2 biggest concerns about retirement: "being a burden" and insufficient resources. The chart about longevity provides some interesting comparisons between generations, with the Gen Xers the most worried about running out of money.  The primary definition of being a burden is that a family member has to physically provide care (pg. 12).  Being diagnosed with Alzheimer's disease is a greater worry the older you are, while cancer is the greater concern the younger you are. (pg. 13).

The third covers "proactive communication" to effectively plan for retirement.  The primary reason given why such conversations don't occur is "avoid[ing] family conflict" followed by discomfort with the topic, closely followed by the belief it won't matter. (p. 16).

The report offers conclusions that I've loosely paraphrased here as: plan for the family, not just yourself; family structure impacts retirement readiness; plan early for your long term care needs; and talk to your family about your plans.  A pdf of the study can be accessed here.

The prior study can be accessed here.

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