Many Baby Boomer's Nests Full of Family Members

By: Jody Smith

The Empty Nest used to be a stage of life that many older Americans both longed for and dreaded. The idea of the kids moving out on their own would mean greater freedom and privacy for mom and dad. It also produced pangs at the thought of missing the kids when they moved out. The Empty Nest scenario has undergone a radical transformation in recent years however. Many parents aren't going to have to worry about missing the kids because the kids are not going anywhere.

Instead the prospect of that anticipated freedom and privacy is waving farewell to mom and dad. And on top of that, savings for retirement may also be waving farewell. It's not always the kids that are the catalyst, mind you. It could be mom and dad's parents, it could also include the grandchildren.

According to an article on Seniorsdaily.net, lots of retirees are shelling out what would otherwise have been earmarked for retirement. The fourth Real Life Retirement quarterly pulse survey by Charles Schwab and Co., Inc. reported that close to half of retirees are offering financial support to one or more people. Over half of that is to children, with 37 percent going to grandchildren. Their own aging parents weigh in at 12 percent.

The Merrill Lynch Wealth Management survey from 2010 reported that 31 percent of Americans with investable assets of at least $250,000 have been supporting members of their families. This has involved cutting back on lifestyle choices by 45 percent, and on personal luxuries by 44 percent. Approximately 25 percent have replaced building retirement saving with taking care of financial necessities. When Baby Boomers' parents are in need of significant health care, the financial burden increases greatly. Some Baby Boomers deal with the financial challenges by having their parents or their children live with them, to decrease some of the living expenses they are juggling.

An Ameriprise Financial survey, as reported on Advisor.com, said that two-thirds of Baby Boomers are helping their children with college expenses, and more than one half of Boomers are helping their children to buy a car. More than one-third of these Americans are also paying some of their adult children's living expenses. Ninety percent of Boomers are giving some kind of financial assistance to their adult children. And one out of every six Boomers are giving financial support to both their children and their own parents as well. Even while some Boomers aren't having to touch their retirement savings to do all this, the fact is, it's taking a lot of money. And this is going to have long-term effects on their savings for the future.

Jody Smith is a freelance writer for EmpowHER.com.

Sources:

Nearly half of U.S. retirees supporting others: study

http://www.seniorsdaily.net/index.php?option=com_content&task=view&id=1634&Itemid=42

Baby Boomers Supporting Parents, Adult Children

http://money.usnews.com/money/blogs/planning-to-retire/2010/04/22/baby-boomers-supporting-parents-adult-children

Generous Boomers Risk Retirement

http://www.advisor.com/story/generous-boomers-risk-retirement

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