66 percent of affluent parents say they'd choose to spend on themselves during retirement than leave their kids an inheritance. (Photo: Shutterstock)
They spend freely enough for their kids' education and upbringing, but affluent parents expect to spend more on their own retirement rather than to keep on supporting their kids.
That's according to Personal Capital's second annual Affluent Family Financial Support Survey, which finds that instead, 72 percent of affluent parents expect their kids to be as, or more, wealthy than they are themselves.
In fact, 81 percent didn't, or don't expect to, change their retirement plans to support their child; while 39 percent said they helped or planned to help their kids get their first job, 50 percent said they stopped, or planned to stop, supporting them once they graduated from college.
It's not that they haven't worked to prepare their kids to succeed, or that they don't plan to leave their offspring a legacy—98 percent do, in fact, plan to leave something for their kids, while 39 percent plan to leave something for their grandchildren and 32 percent intend to leave something for charity.
But 66 percent of affluent parents say they'd choose to spend on themselves during retirement than leave their kids an inheritance.
While the report cites an estimate from the Department of Agriculture for the average cost of raising a child over their lifetime to be $233,610, and says that 65 percent of affluent families reported planning to spend $250,000 or more, on average parents expect to spend $711,000 to raise and support their child over the course of their lifetime, excluding their inheritance.
Undoubtedly one reason that estimate is so high is that 71 percent believe their child expected or will expect them to pay for big ticket purchases including undergraduate studies (54 percent), a car (42 percent) and a wedding (40 percent).
Big-ticket items like that can add up quickly, and parents in the Northeast actually expect that cost to be substantially higher—$996,000, to be exact. Parents in the Midwest, South and West have different expectations, and expect to spend less at $667,000, $581,000 and $579,000, respectively.
Despite that hefty price tag, 54 percent of affluent parents put a priority on saving for their own retirement versus their child's education.
READ MORE:
Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.
Your access to unlimited BenefitsPRO content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Marlene Satter
Marlene Y. Satter has worked in and written about the financial industry for decades.
