The "We" Generation

15 million boomers support parent or grown child A new version of the extended family, the "We Generation," is impacting retirement for many Americans. According to a comprehensive survey conducted for Putnam Investments, 15 million workers age 45 or over are providing financial support for an aging parent or adult child, at a significant cost to their own retirement. Aging parents need help Approximately 29.3 million working adults 45 or older have at least one living parent, and about one-fifth, or 6.2 million people, provide financial support to their parents. About one-quarter of this group say their generosity will likely postpone their own retirement or reduce their savings, and 44 percent expect to work in retirement as a result. These working adults pay an average of $240 per month in parental support. So do one-in-four kids Another group in the "We Generation" are working adults 45 or older with at least one child 25 or older. Of these approximately 23.5 million adults, about one in four either house (20 percent) or write a rent check (4 percent) for grown children. Almost half (45 percent) provide them with financial support. The long-term cost of providing financial support for grown children is high. Forty-three percent of those helping out their kids financially expect it will force them back to work after retirement; 38 percent expect to save less, threatening their standard of living in their golden years, and 29 percent anticipate delaying retirement. Boomers are in the middle "With the cost of housing and living expenses spiraling out of reach for both young adults and the elderly, family members are looking to others in their peak earnings years for help. This places a new, unexpected responsibility on the generation of adults already struggling to prepare for retirement," said William T. Connolly, head of Retail Management at Putnam Investments. "This research further underscores the value of working with a financial professional who's seen it all before and can anticipate the unexpected." Preparing for your own retirement is tough enough. Sixty-eight percent of adults lack confidence in being financially ready for retirement. Despite the hardships imposed by helping parents or grown children, We Generation providers are noble about these responsibilities. Fifty-seven percent of those supporting parents said they were "very pleased" to make the sacrifice, and 38 percent of parents supporting a grown child felt the same way. Parenting your parents Asked what financial lessons were learned from providing support to elderly parents, providers say they'd save money specifically to support their parents, use a professional advisor to plan their retirement, and buy long-term care insurance for their parents. Lifelong childcare? Parents with grown children go beyond providing financial assistance; more than two-thirds provide non-financial support. While about half of this group expect to provide non-financial support for one or two years, about one-fifth expect to provide 5 to 14 years of help and almost 20 percent expect to help out for 20 years or more. Asked if financial support was included in their planning, 70 percent of parents paying for adult children said it came as a surprise. About the Survey "The We Generation: When Retirement and Family Needs Collide" study was conducted online by Brightwork Partners in August 2006 for Putnam Investments. Results are based on interviews with 5,419 respondents, including 1,740 working adults at least 45 years of age with at least one living parent and 1,330 working adults at least 45 years of age with at least one child 25 or older. Maximum sampling error for most figures cited is plus or minus three points. The study's copyright is held by Putnam Investments. Brightwork Partners LLC is a research-based consultancy focusing on retirement issues. Visit www.brightworkpartners.com. About Putnam Investments Founded in 1937, Putnam Investments is one of the nation's oldest and largest money management firms. For more information, go to www.putnam.com.