New survey data released by Hartford Funds shows Americans overwhelmingly are worried about becoming a financial burden on their family members as they age.
Directly tied to this, Americans widely feel that do not have enough money saved to pay their own way during life after work, especially when it comes to maintaining one’s current standard of living. These are pretty well-established findings, notes John Diehl, senior vice president for Hartford Funds, but what is more surprising is just how many adult children in the survey said they are “most worried about their aging parents maintaining a high quality of life.”
“Finances are of course important, but they can be disproportionate compared to qualitative issues like care-giving and maintaining a social network of family and friends in retirement,” Diehl says. “Advisers need to be thinking about these qualitative, human-centric considerations when they approach discussions about aging with their clients.”
While “simply running out of money” and “becoming a financial burden to children” are the top concerns associated with aging identified overall by survey participants, younger respondents between ages 35 and 45 are particularly worried about these issues. Nearly half (45%) cited these concerns, compared with one-third of their older counterparts.
Additional disparities emerged on the topic when looking at subsets according to income, according to Hartford Funds.
“Specifically, those with incomes between $75,000 and $100,000 are more concerned about these issues than any other income group,” the survey findings show. “In fact, they are nearly twice as likely to worry about being a financial burden on children or running out of money as respondents who make $50,000 to $74,999 annually, at 50% and 29%, respectively.
Many advisers and their clients are taking action to meet these concerns, the survey findings suggest. For example, sizable groups of clients are making or have made “strategic living arrangements, including physically moving to accommodate their lifestyles.” Others “are setting themselves up to be accessible for care-giving by moving closer to children or into an aging care home or community.”
NEXT: Quality of life is not just a money issue
The survey results show women, in particular, feel pressed to make arrangements for either giving or receiving care later in life, outnumbering men nearly two-to-one in terms of taking progressive steps today to address these worries.
“Americans’ general top concern for their aging parents is tied to quality of life issues,” Diehl says. “A quarter of respondents feel that having a home their parents are physically able to maintain and easily move around in is most important.”
Others are most concerned about their parents maintaining a social network of friends and family (20%).
“Interestingly, respondents ages 35 to 44 were much more likely than their older counterparts to be concerned about their parents’ ability to maintain a social network, at 28% versus 17%,” according to the survey. “In general, Americans are also addressing the concerns they have about their aging parents by either moving closer to their parents or moving their parents closer to them.”
In particular, 35- to 44-year-olds were more likely than older respondents to move closer to their parents or have parents move closer to them, the survey shows.
“Moving to be closer to your parents or moving them closer to you is a decision with enormous financial and quality of life implications, for both parties,” Diehl warns. “It’s important to proactively communicate with family about these decisions and seek advice from a trusted source.”
It’s high time for advisers to start pushing harder on these points, Diehl concludes. The survey revealed that only a small number of clients “are initiating conversations with their loved ones about their own and their aging parents’ intentions as they age, an underwhelming 14% and 12%, respectively.”