Retirement and Dependency (In Reverse)

3830274-immaturity-concept--adult-man-with-dummy-in-the-mouthA CNN Money article highlighted a recent survey examining worldwide retirement trends.  The survey, conducted by HSBC, found that 18 percent of Americans expect never to retire.  This is only slightly lower than the 19 percent of British who expect never to retire, but much higher than the global average of 12 percent. When I first read the CNN article, I figured those who will work the rest of their lives must somehow be in the bottom quintile of income earners.
I was curious ifthis was the case, hence, I read a copy of the study.  However, the study did not differentiate respondents by income group.  That’s too bad, as it would have helped determine if this statistic represented the income and wealth gap between the rich and the poor (in which case progressives would start squawking about the need for more entitlements) or if there is more to it. Without knowing the earnings or the savings habits of each respondent, I suspect a few things are going on with the 18 percent:
  • Some of them are likely low-income earners that simply will not have enough personal savings to supplement Social Security benefits for the rest of their lives.
  • Some of them are high-income earners who have spent most of their money on current consumption and will have little savings at retirement.
  • Some of them have very unrealistic expectations about retirement.

Let’s assume that the majority are not prepared for retirement through no fault of their own.  However, consider some additional findings from the study.  Globally,

  • 18 percent of retirees “expect to have to support elderly parents.”
  • 35 percent of retirees “expect to be continuing to support their own children.”

As I read further I found that of current retirees whose income is less than they expected, 21 percent stated that they are still supporting children financially.

Okay, I certainly understand the need to support elderly parents.  But can we safely assume that most of these children are of legal and working age (and they are not grandchildren, since the survey question specifies “their own children.”)  If so, why are older generations supporting younger adult generations?  Perhaps it’s the economic outlook for today’s young people, the student loan debts they’re carrying, or the belief of parents that their children should have more than they did, but what will this reversal of generations gain society?  Certainly no financial security for retirees and no perseverance and wisdom for their children.

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Comments (9)

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  1. Buster says:

    My retirement plan is to live with my parents until I’m 85 years old. At that point I hope to have saved enough towards my retirement to be able to afford to (finally) move out on my own. I hope my parents won’t mind supporting me until then.

  2. Joe Barnett says:

    Sounds like baby boomers aren’t spending (or saving) their money wisely, as you detailed in the NCPA study
    How Are Baby Boomers Spending Their Money?http://www.ncpa.org/pub/st341

    Readers of your blog might also be interested to know that a record low percentage of adults are not-employed, as David Ranson discusses in this NCPA study http://http://www.ncpa.org/pub/ib113. So baby boomers who are working are supporting more people than ever before!

  3. Billy says:

    The need to support younger people is primarily the fault of the Baby-Boomers. They’ve taken everything for themselves and are now complaining that they are expected to give back.

    • Cheyenne says:

      Not sure what you mean by them taking everything for themselves, but they should not have to “give back” to kids who cannot find employment because they went and majored in basket-weaving or they expect to get a six-figure salary when they’re 25. If 21-year olds are old enough to drink and smoke and fight wars, then they should not feel entitled to sit around the house and play video games because they can’t find a job.

  4. Lloyd says:

    A good saying:

    “When will you die? You will die when you retire.”

    This is very true in many ways.

  5. Jackson says:

    Exactly.

    Combine this with that fact that young people have little chance at the higher paying jobs until the older generations retire or die and their prospects are even worse.

  6. James says:

    It is all about planning, for your future and for your family. Planning for your future includes a realistic career tracked that has the built in educational costs. Family planning takes a team (usually husband and wife) who budget with unexpected emergencies and retirement in mind.