retirement, millenials, TIAA

TIAA Survey: Financial Confidence Among Adult Children May Stem from Their Parents’ Approach to Retirement Planning

Sixty one percent say they take a different approach to finances to avoid making the same mistakes their parents made

Originally Published by TIAA.
A new survey from TIAA finds Americans who lack confidence in their parents’ financial security in retirement (27 percent) are twice as likely to lack confidence in their own retirement as those who are confident in their parents’ (72 percent versus 36 percent).
More than half of respondents (57 percent) also indicate that their parents’ financial planning for retirement has impacted their own, with almost half (44 percent) avoiding taking on significant debt, and nearly four in ten (38 percent) saying they have adopted a more conservative approach to everyday spending by consciously limiting their spending on non-essentials.
“We’ve seen firsthand what the data shows: people who are concerned about their parents’ financial well-being in retirement may be sacrificing their quality of life today out of concern for their own financial future,” said Dan Keady, chief financial planning strategist at TIAA. “A good financial plan that includes education, advice and lifetime income options for retirement can help build confidence that allows people to enjoy life today, without forfeiting their future retirement security.”

With age comes pessimism about parents’ financial security in retirement

The TIAA survey shows that Generation X and baby boomers are significantly less optimistic than millennials about their parents’ financial outlook. Just over one-third of Gen X adults (35 percent) and only one in four baby boomers (26 percent) describe their parents’ financial outlook as very good or excellent, compared to more than half (52 percent) of millennials.
The same applies when it comes to confidence in their parents’ current or future financial security in retirement. Only 47 percent of Gen X and 34 percent of baby boomers say they are confident in their parents’ current or future financial security, compared to nearly double the number of millennials (60 percent).
These confidence levels mirror how these generations view their parents’ approach to saving and investing. Nearly four in ten Gen X and baby boomers (39 percent and 35 percent) disagree that their parents’ approach to saving and investing is admirable and one to emulate, compared to just a quarter of millennials.
Even among adults who say they are confident in their retired parents’ long-term financial security (20 percent), one in five (21 percent) indicate that they have some or a lot of concern about their parents running out of money in retirement.
“This concern highlights the possibility that running out of money in retirement might mean having to assume the financial burden of supporting their parents. That is why it’s so important to include guaranteed lifetime income sources as part of a comprehensive retirement plan,” said Shelly-Ann Eweka, a director of financial planning for TIAA. “As the realities of financial planning change through life, parents and their children need to discuss their financial plans and concerns together to ensure they are on the same page about the future they’re envisioning.”

Millennials’ optimism may be misguided, highlighting need for dialogue

The survey also found that the perceptions people have about their parents’ financial plans may not always match reality. Seven in ten millennials rate their parents’ financial outlook as good to excellent (72 percent), yet just over half of Gen X and boomers – those likely to represent their parents – rate their own financial outlook the same (57 and 58 percent respectively).
“It is evident that people’s financial habits and retirement planning are shaped by the experiences of their parents,” said Keady. “The confidence that millennials have about their parents’ finances may actually create a false sense of security, especially when individuals mistakenly believe they will receive an inheritance (and plan their finances around it) when their parents don’t have the same plans or intention.”
Individuals can take the first step by initiating a financial discussion with their families to better understand how each other’s financial needs compare. If people are overwhelmed by the thought of putting together a financial plan, they can turn to a financial advisor for help. Advisors can help individuals create a retirement plan that seeks to minimize uncertainty and boost financial confidence by building lifetime income.
“Open dialogues and a well-planned retirement can help alleviate family stress and may give you permission to live your life without the worry of outliving your savings or becoming a financial burden to others,” said Keady.

Latest News

Flint, Michigan water plant

Ex-Michigan Governor Charged for Racist Lead Poisoning of Flint Water Supply; COVID-19 Vaccines Not Increasing in Availability; Democrats Plan to Repeal Trump Rules; and More

Former Michigan Governor formally charged for poisoning thousands of predominantly Black Flint citizens with water containing lead. In 2014, when the city of Flint was forced by the state to begin taking its water supply from the Flint river rather than using water from nearby Detroit as it had for…

NYPD under suit

NYPD Sued for Years of Racial Abuse and Use of Excessive Force; Trump Administration Approves Discrimination Against LGBTQ individuals; and More

NYPD sued by Attorney General for years of racial abuse and use of excessive force. In what’s been called a “landmark lawsuit,” The New York Times has reported that New York state Attorney General Letitia James is suing the city of New York, the mayor and the NYPD’s leaders, alleging…

Toyota Research Institute and Stanford University’s Dynamic Design Lab Study How to Improve Automotive Safety

Originally published on pressroom.toyota.com. Inspired by the Skills of Professional Drift Drivers, Research Seeks to Combine the Technology of Vehicle Automation with Artificial Intelligence Algorithms What if every driver who ran into trouble had the instinctive reflexes of a professional race car driver and the calculated foresight of a supercomputer…

Tribal elder

Loss of Tribal Elders Due to COVID-19 Decimating Indigenous Populations; Colorado Revamps Common-Law Marriage Requirements, Making Them More Friendly for LGBTQ Couples; and More

Loss of tribal elders due to COVID-19 decimating Indigenous populations. The Muscogee, Navajo, Blackfeet Nation, White Mountain Apache and Choctaw tribes are among the many communities of Indigenous people suffering irreparable losses due to the COVID-19 pandemic, New York Times reporter Jack Healy has reported. Already impacted by infection rates…

Justice for George Floyd

Officer Who Pressed Knee Into George Floyd’s Neck to Stand Trial Alone; Judge Halts Federal Execution of Lisa Montgomery, Only Woman on Death Row

Officer who pressed knee into George Floyd’s neck to stand trial alone in March. Former Minneapolis police officer Derek Chauvin — the man who can be seen on video pressing his knee into George Floyd’s neck for an excruciating 8 minutes and 46 seconds — will now stand trial alone,…

BASF Starts Global Registration for New and Environmentally Friendly Insecticide Active Ingredient

Originally published on BASF.com. BASF ranked No. 14 on The 2020 DiversityInc Top 50 Companies for Diversity list. Regulatory dossiers for Axalion™insecticide submitted in Australia and Korea Active ingredient with novel mode of action and high compatibility with beneficial insects, including pollinators First sales for Axalion-based products expected by 2023…

TIAA’s Roger Ferguson on Solving the Student Debt Crisis

CEO Roger Ferguson shares how TIAA (No. 9 on 2020 DiversityInc Top 50 Companies for Diversity list) teamed up with loan wellness platform Savi to help nonprofit workers reduce monthly student debt payments and work toward forgiveness. Watch his full talk at the link below. https://www.tiaa.org/public/foward-focus-/episode-7-your-financial-future-the-path-forward