Retirement Optimism Fading -- And Don't Tell the Family

NEW YORK (MainStreet) – It’s no secret that Americans are, by and large, souring on the idea of a safe, secure, and prosperous retirement.

But how about not being able to retire at all?

That’s the conclusion of a new study from Ameriprise in the form of its regular Money Across Generations study.

This version of the study, sub-titled “Confidence and Conversations”, ranks as a welcome departure to most consumer retirement studies. It’s wide-reach covers financial attitudes among U.S. adults in both a pre-recession and post-recession time span – five years, in total.

Other groups track consumer attitudes on retirement on a one-off basis, or at least annually (the Employment Benefit Research Institute does a good job in that regard – it’s latest study came out in March 2012).

Minneapolis-based Ameriprise uses that wider lens to capture the gradual descent in confidence, and the reluctance among survey participants to discuss their worsening financial predicament with the spouse and kids.

The Money Across Generations study also does what its moniker suggests – tracking retirement attitudes across three generations of Americans – Baby Boomers, their adult children and their aging parents since Spring 2007. As Ameriprise points out, back then, the U.S. unemployment rate was 4.5%, and the average price of gasoline was about $2.50 per gallon (and would fall to $1.75 per gallon a year later).

“Five years later, the financial and emotional scars of the recession continue to linger, casting a cloud of uncertainty over generations of Americans,” says Suzanna de Baca, vice president of wealth strategies at Ameriprise Financial, in a statement. “Consumers have real concerns about job security, investment returns and the future of entitlement programs at a time when they’re also seeing the price of gasoline, consumer goods and health care continue to rise. For many, it feels like the perfect storm.”

What particularly concerns generational Americans, according to the study?Using baby boomers as a benchmark, only 49% of Americans say they are “optimistic” about the U.S. economy, down from 64% when the study was launched five years ag0. But that’s just a big picture statistic. Asked about their own financial future, only 17% of Americans are very optimistic about their own financial future. Five years ago, that survey number was 39%.

Ameriprise offers up some more telling five-year data among Boomers: 

• Assure a financially secure future for themselves and their family (33% vs. 51%)
• Continue their current lifestyle in retirement (27% vs. 44%)
• Help their children or grandchildren pay for their education (24% vs. 39%)
• Assure a financially secure life for their parents (19% vs. 33%)
• Support a charity or cause that’s important to them (18% vs. 29%)
• Preserve wealth to leave to their children (16% vs. 28%) 

Boomer children and their grandparents are also anxious about their financial futures, with 55% of adult children and 42% of Boomer parents “worried” about a secure retirement.

Boomers aren’t talking about their financial frustrations with family members, either. For instance, 41% of Boomers don’t discuss their retirement anxieties with their children, and 27% don’t discuss the issue with anyone.

That could be a big mistake, study researchers say. 

“It is absolutely essential that families engage in detailed discussions about money, including how their current financial situation aligns with their needs and goals,” adds de Baca. “Failure to do so can have significant implications that may ripple across generations for years to come. These are seldom easy conversations, but they are among the most important ones parents can have to help ensure a financially secure future for themselves and their children.”

At this point, any conversation about retirement planning could well be a bitter one, for Baby Boomers, their kids and their parents. 

They can only hope for a better conversation about five years from now.