Skip to Content

Supporting Family Members Can Stall Retirement

BenefitsPro

By Marlene Y. Satter | August 15, 2014

Nearly 60 percent of Americans are supporting either elderly parents or young adult children in some way, support that can often pose a roadblock to retirement, according to national financial education nonprofit American Consumer Credit Counseling. 

In its survey, ACCC found that almost 20 percent of those who help pay the way for another family member are either unable to pay their own debts or are racking up fresh bills in the process, and 12 percent said that they have put off retiring because of it.

“In today’s economy, many middle-aged consumers are getting hit twice as hard when it comes to financially supporting family members. Amid rising college tuition costs and the sharp increase in elder care services, some consumers are forced to make tough financial decisions and delay their own financial goals,” Steven Trumble, president and CEO of ACCC, said in a statement. 

ACCC’s survey underscores the results of a poll by Caregiver Action Network, which found that on average, a family caregiver who tends to the needs of someone 50 years old or older will sink $5,531 into caregiving expenses every year. The poll also said that a child who ends up as a caregiver will lose lifetime wages and retirement benefits that average out to a whopping $303,880.

And considering that graduates are carrying an average of $30,000 in student loan debt when they return to the formerly empty nest in an attempt to save money, it’s no wonder their parents are still on the hook there, too. 

The survey showed that almost 25 percent of parents are helping their kids pay off the bill, and, according to a Sallie Mae poll, 85 percent of parents intend to help their children with some financial assistance after they graduate. A third said they’d do it for six months after graduation, but 50 percent of parents said they’d keep contributing toward those loans anywhere from six months to as long as five years. 

The survey indicated that 81 percent of those who are caring for elderly parents and 59 percent of those who are bailing out their adult kids are paying at least something toward living expenses and bills; fortunately, few in either category reported paying toward their credit card debt. 

But however it’s spent, and whether it’s on grown children or elderly parents, the money is gone, and not there to meet retirement or other needs. 

American Consumer Credit Counseling (ACCC) offers nonprofit credit counseling and debt relief programs for consumers nationwide who find themselves drowning in debt and wondering "How do I get out of debt?" Our certified credit counselors have helped thousands of individuals and families learn how to reduce credit card debt and get out of debt through a variety of credit reduction strategies. Our credit card debt consolidation and debt management plans help achieve credit card relief by consolidating credit cards payments to pay credit card debt down more quickly. We also offer bankruptcy counseling, housing counseling and other financial education services.

SiteLock Better Business Bureau Mass Housing Approved National Industry Standards for Homeownership Education and Counseling NFCC Member