A new study shows that most Americans can’t pay for their own needs, let alone their aging parents.
Don’t worry about your kids putting you up in a retirement home. They probably can’t afford it. And you probably won’t be able to afford one either.
A new study found that because of inflation and talks of recession, most adult children are concerned about their parents’ finances. The American Advisors Group, a mortgage lender, found that they’re also stressed about picking up that responsibility.
More than a third of all adult children are worried that their parent’s financial problems will fall onto them. More than that, 50 percent expect that their parents will have to move in with them.
Those fears aren’t unwarranted. Federal data shows about half of adults near retirement age don’t have anything actually saved for retirement.
Caring for a parent isn’t as simple as renting a moving truck, especially if they struggle with their health and finances. Caregivers spend an average of $7,242 in out-of-pocket expenses per year for their loved ones.
Many Americans are already taking on debt just to make ends meet and can’t fit another $7,000 into their budget.
“Older Americans are feeling the effects of inflation and their children are worried that their parents aren’t going to have enough money to sustain their retirement years,” said AAG Chief Marketing Officer Martin Lenoir.
Putting plans on hold
It takes years of saving to safely retire. But with today’s inflation rates, people are scared their dollars won’t keep up and their hard work will go to waste.
A new survey from Quicken concluded that nearly half of the Americans who were going to retire in 2022 decided to keep working. The financial software company polled over 1,000 adults. They found that 25 percent of those who weren’t even planning on retiring this year are still delaying their plans.
Respondents told Quicken they had to delay retirement because of inflation (65 percent), the declining stock market (45 percent), and higher interest rates (30 percent).
“Through the end of 2021, we were in an unusual environment with plenty of jobs, a buoyant stock market, and tame inflation,” said Eric Dunn, Quicken CEO. “In 2022, it’s a different story.”
Over the last decade, inflation hardly went over three percent. In 2022, inflation has reached over eight percent.
The toll of caretaking
Without money to retire or take care of themselves, some parents will look to their children for help.
AAG found that 35 percent of adult children are worried their parents will be a financial burden to them at some point. Caring for a sick or aging loved one, as much as it can feel rewarding, can do a lot of damage to someone’s finances.
Not only are there more expenses to budget for, but caretakers lose out on money in other ways too. According to Debt.com’s previous reporting, 6 in 10 caretakers have to make workplace accommodations (like reducing hours at work) to make time for their loved ones.
They’re also more likely to decline promotions or strain their relationships with employers.
Children can go broke helping their broke parents. Nearly 1 in 5 caretakers have to take out a loan or pull from their retirement savings. They lose out on their own retirement because their parents couldn’t retire or support themselves.
Times are tough for everyone. Debt holds many Americans back from achieving their retirement saving goals. Check out this in-depth report on how to save for retirement – even if you have debt.
Published by Debt.com, LLC