TD Ameritrade Survey: Parents and Grandparents Forgo Frills to Save for Retirement and Raise Kids

OMAHA, Neb.–(BUSINESS WIRE)–The results are in. Moms and dads really can’t have it all – or at least
they can’t without some form of compromise. So say the 2,000 parents who
took part in the TD
Ameritrade Parents and Grandparents Retirement Survey
, which
examines the financial habits and attitudes of millennial parents and
boomer grandparents.


While their parenting philosophies may be worlds apart, on this much the
generations agree: parents of all ages are willing to make significant
personal trade-offs in order to support their growing families without
losing sight of their long-term financial goals.

However, parents of both generations agree that such trade-offs should
not come at the expense of loved ones. While 54 percent of grandparents
find the combination of saving for retirement and supporting adult
children “very stressful,” they and their millennial parent counterparts
agree that family still comes first.

Trade-offs that are non-starters include:

  • Spending less on children: just 20 percent of grandparents and
    12 percent of millennial parents would be willing to spend less money
    on their children
  • Having fewer kids: 15 percent of millennials would be willing
    to have fewer children
  • Supporting aging parents: 5 percent of millennial parents and 2
    percent of grandparents would cut back on financial support to aging
    parents

More preferable trade-offs include lifestyle changes, like:

  • Simpler living: half of millennial parents (49 percent) and
    boomer grandparents (54 percent) would be willing to live a simpler
    lifestyle to help retirement savings last longer
  • Less “going out”: nearly half would cut back on eating out and
    entertainment (46 percent millennial parents and 49 percent
    grandparents)
  • Buy second-hand: 39 percent of millennial parents and 45
    percent of grandparents would buy a used car
  • Delay retirement: about a third would retire at a
    later age (36 percent of millennial parents and 32 percent
    grandparents)
  • Travel less: nearly a third (29 percent) of both
    generations would cut back on vacations
  • Downsize: about a quarter would live in a smaller home (27
    percent millennial parents and 25 percent grandparents)

“It’s encouraging to see that both generations of parents recognize
there are trade-offs and are willing to make them in order to keep their
retirement plan on track,” said Matthew Sadowsky, director of retirement
at TD Ameritrade. “But it can be easier said than done and to put this
into practice, parents should take a hard look at what they’re truly
comfortable scaling back on, if need be.”

These trade-offs appear to be working. Most parents and grandparents
have never had to withdraw money from their retirement accounts to
support their families (60 percent of millennial parents, 52 percent of
grandparents). However, there is still a sizable segment of the
population (40 percent of millennial parents, 48 percent of
grandparents) that has – proof that even the best laid plans can go
awry. Expenditures in these cases included:

  • Emergencies (20 percent millennial parents, 24 percent grandparents)
  • Household bills (16 percent, 17 percent)
  • Medical expenses (13 percent, 11 percent)
  • Vacations (10 percent, 4 percent)

“Tapping into retirement accounts early can put your retirement at risk,
and for those parents serving as the ‘family bank,’ this could
negatively impact the whole family,” Sadowsky said. “Retirement savers
are able to stay the course and stay disciplined by taking a few
fundamental steps, including: setting aside an emergency fund so they
don’t need to tap into their retirement nest egg to cover unexpected
expenses, and developing a clear financial plan that can help protect
and potentially grow their nest egg. People with a financial plan are
three times as likely to be confident they will reach their retirement
goals
.”

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Brokerage services provided by TD Ameritrade, Inc., member FINRA (www.FINRA.org)/SIPC
(www.SIPC.org).

Survey conducted by Head Solutions Group
Head Solutions
Group (U.S.) Inc., is a leading market research partner for Financial
Services companies in North America. With offices in New York, Toronto
and Montreal, Head delivers the deep customer insights that increase
institutional knowledge and propel business action. TD Ameritrade and
Head Solutions Group are separate and unaffiliated firms and are not
responsible for each other’s services or policies.

About the 2016 Parents and Grandparents Retirement Survey
A
18-minute online survey was conducted with 2,018 American adults (half
millennial parents age 19-37, half grandparents age 50-70 with adult
children) by Head Solutions Group, between Oct. 20 and Oct. 26, 2016, on
behalf of TD Ameritrade Holding Corporation. The statistical margin of
error for the total sample of N=2,018 American adults within the target
group is +/- 2.1 percent. This means that in 19 out of 20 cases, survey
results will differ by no more than 2.1 percentage points in either
direction from what would have been obtained by the opinions of all
target group members in the United States. Sample was drawn from major
regions in proportion to the U.S. Census.

Source: TD Ameritrade Holding Corporation

Contacts

TD Ameritrade Holding Corporation
For Media:
Rebecca
Niiya, 402-574-6652
Sr. Manager, Corporate Communications
rebecca.niiya@tdameritrade.com
@TDAmeritradePR
or
For
Investors:
Jeff Goeser, 402-597-8464
Director, Investor
Relations
Jeffrey.Goeser@tdameritrade.com