More than half of Generation X and 40 percent of baby boomers have never given their children advice on retirement planning, according to a new study by the North American Company for Life and Health Insurance.
An industry leader in retirement claims that this lack of discussion about financial matters can have a significant impact on future savings.
“Even when Americans talk about retirement with their children, it’s clear from this study that their advice is vague,” said Ann Hughes, chief distribution officer. “The first step to helping the next generation achieve financial success may simply come from clearly sharing what you’ve learned from your mistakes.”
Baby boomers reported spending money on unnecessary things, accumulating too much debt, and not saving for retirement when they were young. However, that’s not what they discussed with their children, according to the study. And with even more members of Generation X saying they regret spending and debt accumulation than previous generations, they may be on the verge of repeating their parents’ mistakes.
Boomers and Generation X share similar financial fears, according to the study. About 66 percent of baby boomers admit to being worried about outliving their retirement savings. Generation X is even more fearful – 77 percent report the same concern.
These fears may stem in part from the fact that many in Generation X are being squeezed – with nearly one-fifth of this “sandwich generation” supporting their parents and 71 percent supporting children.
To ensure your savings last a lifetime, start by assessing your current retirement strategy, including benefits like Social Security and any other income sources. Then, examine your future financial needs.
You may also want to explore options like a fixed indexed annuity, which can help protect your assets from market volatility and generate stable lifetime income.
While the survey results suggest an increasing involvement of parents in retirement planning, there is clearly room for improvement in communication about these matters.
“Too often, money becomes a taboo topic or a source of embarrassment,” Hughes said. “Taking time for these discussions can help encourage each generation to avoid the same mistakes their parents made and plan better for the future.”
Source: StatePoint