Parents to Kids: You’re on Your Own
Almost 40% of young people aged 13 to 22 (so-called Generation Z) expect to receive an inheritance and thus do not need to save for retirement. At the same time, just 16% of their parents expect to be able to…
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The figures come from a new study by TD Ameritrade Holding Corp. (NYSE: AMTD) cited in USA Today. The report also cites a study from PNC Financial Services Group Inc. (NYSE: PNC) in which 58% of parents surveyed said that leaving an inheritance is not a primary concern. In fact, only 2% said it was a primary goal. Saving for retirement is a primary goal of 42% of respondents.
Parents’ worries about rising health care costs and lower returns on investments are forcing them to pay more attention to their own retirement needs. With the disappearance of defined benefit retirement plans in favor of the riskier defined contribution plans, stock market performance plays a much larger role in most people’s retirement plans. Longer life expectancies play into those worries as well.
If there’s a bright side for Generation Z, parents do not expect their kids to help out if the parents’ retirement funds run out. All this means that government programs like Medicare, Medicaid and Social Security will play an increasingly large role in people’s retirements, whether or not they choose to admit it.
Paul Ausick
Contact [email protected] for any questions or corrections.
Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.
