Financial professionals worry about the amount that Americans spend on their adult children during years when they should be concentrating on saving for their own retirement. Most people do not expense for taking care of their adult children. It is important for clients to understand that money that is flowing out at this point will reduce their retirement.
In a study of 1,006 affluent baby boomers, conducted in December, found that 93% have provided some level of support to their adult children. This is not just because of the current economic conditions either. A similar study done in 2007 found that 92% provided support for adult children. Because this money is generally taken from discretionary cash flow, parents are not linking this to reducing their retirement. The study also found that only 24% of the responding boomers are putting away money for the future.
