During the last five years, three out of five (62 percent) Americans age 50 and older have provided financial assistance to members of their family, including adult children, parents, grandchildren, siblings or other relatives, according to a new Merrill Lynch study. This is a reminder of the generosity that runs through our culture, and of the importance people place on helping family, especially during challenging times.
Conducted in partnership with Age Wave, “ Family & Retirement: The Elephant in the Room” is an in-depth study exploring modern family interdependencies and the challenges boomers (currently age 47 to 67) face in balancing them with their own retirement plans and financial security. Conducted in August 2013, the study is based on a nationally representative survey of more than 5,400 respondents.
The average financial assistance provided to family members during the last five years was nearly $15,000 – and significantly more among the nation’s wealthiest families. This support may have been to help relatives meet a one-time need or ongoing assistance over the course of many years, and was often given without expecting anything in return. However, the vast majority of people age 50+ (88 percent) have not factored such support for family into their financial planning. The study also found a dangerous absence of proactive discussion and establishment of safe boundaries among family members as they navigate these interdependencies.
“Given the challenging economic climate during the past several years, it’s not surprising that so many Americans have extended financial support to their loved ones,” said Andy Sieg, head of Global Wealth and Retirement Solutions for Bank of America Merrill Lynch. “However, 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.”