Navigating your own retirement planning can be plenty tricky on its own. Doing the same for your parents can be downright difficult. But millennials are rising to the challenge.
A new study reveals most millennials would rather their parents live as comfortably as possible during retirement — even if it means they won’t be getting as large of an inheritance.
As their baby boomer parents begin to reach their golden years, many millennials are putting their money where their mouth is.
The financial relationship between baby boomers and millennials has grown strained over the years. Thanks to soaring costs for housing and education, many millennials required additional financial support from their parents, and for longer than previous generations.
As aging parents prepare for their own retirement, they have a difficult decision to make: Continue to help their adult children? Or prioritize their own expenses and lifestyle?
According to a flurry of surveys, 63% of aging parents plan to prioritize their own retirement over providing financial support to their kids. Additionally, 55% of retirement-age parents said they plan to leave less money to their children in order to be financially secure during retirement.
While you might think millennials would be resentful of this attitude from their parents, the study suggests the opposite is true. The majority of millennials — around 68% — are worried their parents won’t have enough cash for retirement and encourage their parents to prioritize their own bills.
If you find yourself helping a parent prepare for retirement, financial experts suggest testing out a retiree-budget before they reach retirement age. In other words, build a budget that will work for your parents in retirement and test it out for a few months while your parents are still working.
As long as you’re factoring cost-of-living increases, this can be a great way to gain some clarity surrounding your parents’ retirement plan, and your own future.
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