Parents and Kids Both Influence the Flow of ‘Modern Money’

Shifting attitudes about supporting adult children financially have helped reshape Americans’ thinking about wealth and retirement readiness, according to Ameriprise Financial survey data.

Ameriprise Financial has released a new report, “Modern Money,” which compiles the survey responses of more than 3,000 U.S. investors ages 30 to 69 with at least $100,000 in investable assets.

In offering a sneak peek of the findings to PLANADVISER, Marcy Keckler, vice president of financial advice strategy for Ameriprise Financial, discussed how attitudes toward conventional financial goals such as homeownership, supporting children, and retirement have shifted across generations.

“The study sheds light on how these changes impact investors’ relationship with money,” Keckler said.

According to the Modern Money report, 78% of investors say achieving financial success has been the same or easier for them than it was for their parents at the same age, but over half (51%) think it will be harder for the next generation in their family to feel comfortable financially.

As Keckler observed, many of today’s investors are providing financial support to their children at a higher rate than they received from their own parents. She noted that a lot of this has to do with the ballooning cost of a higher education.

“Nearly two-thirds of respondents say their parents helped them pay for their college education,” Keckler said. “When it comes to helping their own children pay for college, 87% of respondents say they have or plan to assist with this milestone.”

The data shows one out of three respondents say they have delayed their own retirement or would do so to help their kids with this expense; however, only 10% of respondents say their parents made this same sacrifice for them.

“Parents delaying their retirement to pay for their children’s college education could be a potential red flag,” Keckler said. “As individuals juggle competing financial goals, they should have a plan in place to ensure they’re not sacrificing their financial future in order to fund other priorities. You only get one shot at saving for retirement.”

Keckler said parents that feel squeezed between supporting their adult children financially and planning for their own retirement must push their children to live within their means and to understand that financial independence might require making compromises—for example attending an affordable university or choosing to have a small wedding.

The Ameriprise survey data shows more than half (54%) of respondents say their parents helped pay for their first car, but an even greater percentage (80%) say they either intend to or have already helped pay for their own children’s first vehicle. In addition, the study shows that financial support from modern parents often continues in adulthood. Investors have assisted or plan to assist their kids financially with wedding expenses (78%) and a first home purchase (40%).

Comparatively, when reflecting back on their experiences as young adults, 51% of respondents say they received help from their parents for their nuptials while only 19% received help from their parents for their first home.

One interesting finding is that the vast majority (92%) of respondents who met the $100,000 asset floor for participation in the survey report owning their home. Despite many viewing homeownership as a good investment, it is not the primary reason they bought their home, the report shows. In fact, the No. 1 driver is that it gives them “a sense of pride in being a homeowner.” The remaining 8% of respondents who identify as renters say the top reason they don’t own is that renting provides more flexibility. These investors are applying the money they could have used to buy a home toward other financial goals—71% are using the money to save for retirement, as an example.

Keckler said she was a bit surprised to see that families still largely remain “mum about money.”

“Half of investors think discussions around money are still as taboo today as they were a decade ago, but this sentiment is gradually shifting,” she said. “The Modern Money study reveals younger generations are more open to discussing money matters with others.”

On this point, the data shows 26% of Millennials surveyed said they talk with their friends about how much they spent on a major purchase, compared with 18% of Generation X and 12% of Boomers. Millennials are also more likely to talk with their friends about their salary and how much money they have invested, compared with Gen X and Boomers.

“Talking about money pays off,” Keckler concluded. “Our research finds that investors who have more financial confidence are more likely to speak with others about money. Consulting a financial professional may be a good place to start, especially for those who find this topic difficult to discuss.”

Additional findings and information about the study are available at