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Data & Research August 14, 2014
Supporting Family Can Hinder Retirement Readiness
Providing financial support for family members is throwing a wrench in some Americans' plans for retirement.
Reported by Kevin McGuinness
Fifty-six percent of Americans are providing some form of financial support to either their elder parents or young adult children by means of housing, living expenses and transportation, according to a recent survey by financial education nonprofit American Consumer Credit Counseling. For employees indicating they play a financially supportive role in a parent or child’s life, nearly 20% are unable to pay off their debts or are accruing more debt because of it. In addition, 12% have delayed retirement.
“In today’s economy, many middle-aged consumers are getting hit twice as hard when it comes to financially supporting family members,” says Steven Trumble, president and CEO of American Consumer Credit Counseling, based in Boston. “Amid rising college tuition costs and the sharp increase in elder care services, some consumers are forced to make tough financial decisions and delay their own financial goals.”
According to the survey, 81% of those supporting aging parents and 59% of those assisting adult children indicated they help financially with living expenses and bills, while very few cited support for paying credit card debt. When it comes to student loans, nearly 25% of parents are financially contributing to their child’s college debt.
“Whether it’s an aging parent or a child returning from college, the expenses can hit hard and have a long-term effect on your own financial situation,” says Trumble. “By working together to determine a financial plan that works for everyone, consumers can help prevent future financial damage, while also providing their loved ones with the short-term support they need.”
The survey is the most recent in a series of online polls asking consumers about topics related to money management, budgeting, identity theft, and spending habits. More information about the survey, including an infographic, can be found here.
American Consumer Credit Counseling (www.consumercredit.com) is a provider of free credit counseling, bankruptcy counseling, and housing counseling to consumers nationwide in need of financial literacy education and money management.