Survey Reveals Adult Children of Retired Parents Need More Discipline In Retirement Planning

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Boomers Not Following Retired Parents’ Example of Saving, Debt Avoidance; But More Comfortable with Investment Risk and New Financial Vehicles

Reston, VA, [June 10, 2008] — Some lessons are never learned. This is the key finding of a new study announced today by NAVA, the Association for Insured Retirement Solutions. The “Generational Differences in Retirement Planning (GDRP): Adult Children of Retired Parents” study revealed that baby boomers are failing to follow the tried-and-true retirement planning disciplines that enabled their parents to achieve a satisfying retirement. However, the study also found that boomers possess a more adventurous attitude that could actually benefit their retirement planning efforts in the long run.

Among the findings of the NAVA GDRP study is that boomers have a less positive view of their parents’ retirement than their parents themselves. In fact, only 37 percent of boomers surveyed said they would be very satisfied with their parents’ lifestyles. And, the majority of the boomers surveyed expect a different lifestyle; with 86 percent of those respondents expecting it to be better than that of their parents.

The complete findings of the NAVA GDRP study are available for download on the NAVA Web site at:

The NAVA GDRP study was conducted by Mathew Greenwald and Associates, a leading market research firm that specializes in retirement issues. More than 1,000 people age 45 to 65 were surveyed about their expectations for retirement and the experiences of their retired parents. The study then compared those findings with a survey of 100 retired people age 70 to 80 regarding their views on retirement as compared with that of their adult children.

Lofty Goals, Limited Discipline

Despite their desire for a significantly better retirement lifestyle, most boomers are not following their parents’ example of financial discipline, and are not taking the necessary steps to achieve their own lofty retirement goals. Specifically, according to the retired parents, most attributed their retirement success to several key factors, including: the avoidance of credit card debt (81 percent), the creation of an emergency fund (86 percent) and their ability to save enough for retirement (79 percent). Boomer responses, on the other hand, indicate that they are not taking these examples to heart:

· Only 15 percent of boomers said retirement saving was the most important financial
lesson they learned from their parents

· Only 21 percent of boomers believe they have done an “excellent job”
saving for retirement

· Only 44 percent of boomers said they have done a “good job” saving for retirement

· Only 32 percent of boomers said they did an “excellent job” creating an
emergency fund

· Far fewer boomers reported success in avoiding credit card debt — a 24 percentage
point difference from their parents’ responses

In addition, with 64 percent of baby boomers categorizing their parents’ nest eggs as “modest” or “quite small,” the study underscores the fact that boomers will need considerably more money to fund the type of retirement lifestyle they envision.

“It’s clear that many boomers can still learn a lot from their parents when it comes to preparing for retirement, however, many simply aren’t listening,” said Mathew Greenwald, president of Greenwald and Associates. “The reasons for this are unclear, but it may have quite a bit to do with historical experiences. The elderly parents, many of whom lived through The Great Depression, understandably have a much more frugal approach to retirement. The boomers, having experienced wealth and prosperity most of their lives, have a sense of entitlement, which leads to lofty retirement expectations.”

“Whatever the reason, the boomers’ lofty goals coupled with misperceptions of what it really takes to achieve financial security, the fact that many don’t have the company sponsored pension plans their parents are enjoying and the reality that they will need significantly more retirement savings than their parents, may be the defining issues standing in their way of achieving the retirement of their dreams,” continued Greenwald. “However, the one thing boomers have working in their favor is better money management skills and a more adventurous attitude, with makes them more inclined than their parents to try new financial products and invest in equities — both of which could potentially help them improve the chances of meeting their retirement goals.”

More Aggressive Attitude Could Benefit Boomers

Despite boomers misperceptions about what it takes to achieve financial security in retirement, the study also demonstrated that the majority is willing to consider new financial products, including annuities, to help them meet their retirement goals. Specifically, 76 percent of boomers expect to invest more aggressively than their parents have done in retirement. In addition, two-thirds expect to differ in their willingness to use new types of financial vehicles, with half considering the guaranteed lifetime income annuities provide an “attractive” option.

“Only annuities offer the benefit of guaranteed retirement income that cannot be outlived, which can help retirees ensure that their core retirement expenses are covered,” said Kathleen Driscoll McKee, NAVA spokesperson. “Moreover, relatively new variable annuity ‘living benefit’ features enable boomers to invest more aggressively in the equity markets, thus, allowing them to take advantage the historically higher returns with the assurance that their investment is protected. These features can be especially valuable to boomers who have not prepared adequately for retirement and are less likely to build their nest eggs fast enough through more conservative investments.”

About NAVA
NAVA, Inc., the Association for Insured Retirement Solutions, is a non-profit trade association located in suburban Washington, D.C. NAVA provides a variety of services to the industry including educational forums, research, and conferences aimed at furthering the development and understanding of fixed and variable annuities, income annuities, and variable life insurance. NAVA also maintains and supports an educational website for consumers at

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