Retirees seem to have a good handle on their own saving, spending and debt levels, but many are supporting their children and grandchildren and feel stressed by these unplanned expenses, according to Millionaire Corner research.
A large majority – 85 percent - of Millionaires age 65 and older expects to live comfortably in their retirement, according to a study completed by Millionaire Corner in the first quarter of 2012, but nearly 70 percent say they are concerned about the financial situation of their children or grandchildren – ranking the wellbeing of future generations as their top financial concern.
Forty-five percent of these older Millionaires – who have investable assets of $1 million to $5 million – count financing the education of their grandchildren among their personal financial concerns, and 11 percent say they are worried about the educational costs of their children.
While concerns over children and grandchildren are foremost, seniors express relatively low levels of concern over their personal debt levels, according to a survey of more than 990 investors from a range of wealth levels conducted by Millionaire Corner in April. Less than 15 percent of investors age 61 and older said they were “very concerned” or “concerned” about their level of their debt, while more than 68 percent said they had little or no concern about personal debt levels. In contrast, 36 percent of investors age 40 and younger are concerned or very concerned about their debt – and fewer than 38 percent express little or no concern about the amount they owe.
Unexpected medical expenses are the most common source of personal debt for investors age 61 and older, but seniors are significantly less likely than younger investors to take on debt due to unrestrained spending, an underwater mortgage or student loans. But, the latter category – student debt – is a growing worry for seniors who find themselves unexpectedly involved in financing the college costs of a child or grandchild.
More than one-fourth – 27 percent - of the senior citizens surveyed in April are contributing financially to a grandchild’s education, and about 8 percent are helping a child with educational expenses. While more than 70 percent of these seniors figured the educational expenses of a grandchild into their long-term financial planning, some have been caught off-guard by the need to help their children’s children through college. More than one-third of the seniors surveyed in April agreed with the statement “I have major financial concerns about the education expenses of my grandchild.”
Among seniors who are contributing to a grandchild’s education, most are paying 10 percent or less of the costs, but about 15 percent are paying between 50 percent and 75 percent, and nearly 10 percent are paying the entire bill. Few seniors believe their grandchildren should increase their contributions to college costs, but more than 16 percent feel the grandchild’s parents providing more support.