Generational Wealth and More Reasons Millennials Should Address Their Parents’ Retirement Savings Before It’s Too Late
Talking about money is never easy — especially when it comes to your parents. Most people with aging parents have never had a conversation with them about their finances, retirement or savings. What makes the talk even more difficult is that a majority of baby boomers aren’t ready for retirement, and many have no savings at all.
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There’s also the well-known issue of the generational wealth gap and a knack for overspending. Baby boomers control more than half of the wealth in the U.S. — $59.96 trillion — while millennials hold just 4.6%, or $5.2 trillion in U.S. wealth, according to data from the Federal Reserve.
Despite the wealth gap, some baby boomers are completely unprepared for retirement.
According to the 21st Annual Transamerica Retirement Survey, the average retirement savings amongst baby boomers is $202,000; however, the Motley Fool noted that this may only give boomers a little less than $8,100 a year in income. When you factor in Social Security benefits, with the average senior collecting about $1,557 a month, or around $18,700 per year, that only amounts to an annual income of about $26,800. That isn’t much at all.
A recent report by Insured Retirement Institute, saying that a majority of baby boomers aren’t prepared for retirement, and 45% have no retirement savings at all.
But the problem is preventable with a simple conversation. However, according to a 2019 survey by GOBankingRates, out of 1,001 Americans polled, 73% have never had an in-depth financial discussion with their boomer parents.
More than one-fifth of respondents said they don’t think it’s ever appropriate to talk to their parents about finances because it’s none of their business. About 22% of survey respondents also stated that they’ll only talk about finances with their parents when they show signs they need help.
See: Surprising Ways Gen X and Boomers Are Worlds Apart Financially
Find: Baby Boomers Can Grow Their Retirement Savings Quickly in 10 Simple Ways
No matter how awkward the conversation may be, talking about money with your parents is crucial. Waiting to have these conversations until something happens could be too late.
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