As a result, only three in 10 American parents are confident they are adequately preparing themselves financially for retirement, according to a nationwide study in MassMutual’s State of the American Family series.
Despite parents’ insistence on paying for their children’s education, the study found that half of those who set this as a priority say they won’t have the money needed to fund a future college education, nor do they know how much they need to save.
Nearly four in 10 (39%) Americans have developed a plan for their retirement saving. Among women, it’s only about three in 10 (31%) – despite the fact that women can expect to spend more than 50% more time in retirement than men. Perhaps this is why more than six in 10 (63%) of those surveyed plan to work part-time during their retirement.
Even though some Americans have gained confidence in their ability to manage money, many more still struggle with basic financial literacy; 38% say they are strongly confident about managing money, up from 30% last year. About half are moderately confident in their ability to manage money, yet only 28% actively seek ways to educate themselves on finances.
Americans are not just preparing for their own needs; close to a quarter plan to care for their parents' as well. Most are mindful of the stress that can result from having to be financially responsible for both children and parents: 71% say it's important that their children aren't burdened by taking care of them when they're older.
The survey also found the economic downturn affected families' finances in unforeseen ways, and many are still feeling the effects. Only 19% of those surveyed are satisfied with their current financial situation and close to three in 10 (28%) have delayed purchasing big items because of the recession. Yet there may be a silver lining: 60% of Americans are careful not to accumulate debt, up from 50% last year, and 70% want to be actively involved in decisions regarding their finances.
Less than 10% of those surveyed learned about managing finances from their elders, and a quarter wish that their parents taught them more about money. However, Americans may be trying to change the patterns from the past – close to eight in 10 (78%) think it's important that they educate their own children on finances to ensure a strong economy in the future. This sentiment is especially stronger among women (84%) than men (71%).To learn more about MassMutual's State of the American Family Study, go to http://www.massmutual.com/familyfinances.