Families Feel Strong Financial Responsibility--Within Limits

The question in a prolonged economic downturn is not so much if you are better off than a year ago, but will you be better off a year from now. And what of the next generation? Will they be able to exceed, or at least match, the current generation? A majority of investors (86 percent) recently surveyed by Millionaire Corner believe the next generation will have it tougher than they do. This is up from 79 percent who responded similarly in a 2011 Millionaire Corner survey..

Financial obligations to parents and children are pressing concerns even in Millionaire households. Fifty-five percent of households we surveyed with a net worth between $1 million and $4.9 million (not including primary residence) are concerned about caring for their aging parents, up from 47 percent in 2010. Thirty percent—up from 27 percent—are concerned about financing their children’s education, while 35 percent are concerned about funding their grandchildren’s education.

Millionaire baby boomers ages 55-64 expressed the most concern about most of these issues (those younger than 55 were more concerned about paying for their children’s college education).

A recent MetLife cross-generation survey that examined peoples’ feelings of financial obligation to family on a variety of issues. Family ties are strong, the survey found, with “a sense of strong responsibility and obligation” felt across the generations toward saving enough for retirement so as not to be a burden on family members, having a parent live with them if they need help due to health or financial issues, helping to pay for a child’s college education, making sure a spouse or child has enough money if the primary provider dies unexpectedly, and providing strong and consistent emotional and non-financial support.

Baby boomers feel more financially secure than members of Generation Y (ages 21 to 34) and Generation X (ages 35 to 46), but the desire to give more to children and grandchildren is felt universally across the generations, the survey found.

But there are limits. For most, the survey found, family is responsible for providing financial support to adult children in severe circumstances. There is less enthusiasm for helping an adult child pay for a house, offering them assistance at a time of financial difficulty, or providing an inheritance.

Still, respondents across the generations place a strong value on being financially independent and not being "a burden."