Schwab Study Finds Nearly Half of Retirees Supporting Others in Retirement

Tue Sep 8, 2009 8:00am EDT

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Added Financial Strain Highlights Need to Prepare for Realities of Retirement 
SAN FRANCISCO--(Business Wire)--
The fourth Real Life Retirement quarterly pulse survey by Charles Schwab & Co.,
Inc. reveals that many retired Americans are lending financial help to their
families, either by giving them money or managing their finances directly.
Almost half (44 percent) of those who are retired admit to supporting at least
one individual financially. Children (53 percent) and grandchildren (37 percent)
top the list of such dependants. An additional 12 percent are contributing to
their parents' finances. 

"Whether it`s their children, grandchildren or their own parents, more and more
retirees are finding themselves supporting family members and, simultaneously,
witnessing portions of their hard-earned savings disappear," said Mark Jamison,
vice president at Charles Schwab. "This is just the sort of retirement reality
that we really encourage clients to prepare for - the unexpected." 

Tips for Dealing with Financial Pressures from All Sides

Your Retirement Takes Priority: Putting your own finances ahead of others may be
tricky to stick to but is essential to your retirement. Take time now to
determine how much you would like to have set aside for retirement which depends
upon a realistic assessment of the lifestyle you want to have when you stop
working. 

Helping Your Parents: Your own retirement comes first, but your folks`
retirement is a very close second. Beyond a check, there may be more sustaining
ways to help them help themselves:

* Check up on their retirement entitlements such as Social Security and Medicare

* Do they have assets such as a house they could borrow against? 
* Help them establish a realistic budget. 
* Make sure they have an appropriate plan in place for generating income from
any existing investments 
* Can other siblings help out as well?

Supporting Your Kids: As much as you love them, children should be last on your
priority list financially. Take this opportunity to demonstrate good habits -
working with them through your own budgeting and debt management. Encouraging
their financial independence now will actually be to their benefit in the long
run. 

A Frugal Future

Almost half (44 percent) of retired respondents reported that an unsteady
economy has made them more frugal with their spending in the past six months.
Those still working have an eye on this approach too. Almost two-thirds (37
percent) of Americans who have yet to retire predict that due to the economy`s
fragile state, they will be spending more conservatively during their retirement
than they originally planned. 

Gender Divide

Six million more women than men (44 million versus 38 million) are planning to
be more mindful of their spending during retirement than they might have been
before encountering today`s unstable economy. The difference extends to current
retirement savings. According to the survey, on average, men have secured more
funds for their golden years than women ($247,000 vs. $180,000). 

Putting in Longer Hours

Another strategy to cope with tight purse strings is to simply stay in the
workforce longer. Close to four in ten (35 percent) Americans who haven`t
retired yet plan to delay this milestone. Similarly, some of those on the other
side of the coin are wishing they hadn`t stopped working so early; almost one in
five (17 percent) retired Americans are considering returning to work, at least
part-time, due to the economy. 

"The economic downturn has reminded us how important it is to be financially
prepared for just about any possible scenario," said Jamison. "Adjustments can
and must be made to accommodate this added financial weight in retirement.
However, as much as possible, anticipating these added costs in retirement and
concentrating on saving now can be the difference in achieving a successful
retirement." 

Continued Asset Gap

Findings also show a consistent lack of savings among pre-retirees. The average
amount of money respondents have put away for retirement is $219,000 which is
nearly $1,800,000 less than most commonly believe they will need to retire
comfortably. Not coincidentally, one-third of survey respondents (35 percent)
currently plan to retire later than planned. 

The information provided here is for general informational purposes only and
should not be considered an individualized recommendation or personalized
investment, tax or legal advice. Any investments and strategies mentioned here
may not be suitable for everyone. You should consult with a financial
professional for more information. 

For More Information

Charles Schwab encourages individuals to take advantage of Schwab`s Real Life
Retirement Services, which provides a realistic approach to retirement, not only
offering key insight into actionable ways to save for and manage retirement
savings, but also providing guidance on products and services and access to
stories from Americans who have successfully moved into life`s third act. For
more information please visit, www.schwab.com/RealLifeRetirement. 

About the Study

The Charles Schwab Q3 Retirement Omnibus Survey was conducted by Kelton Research
between July 29th and August 5th, 2009 using Random Digit Dialing of listed and
unlisted numbers. Quotas are set to ensure reliable and accurate representation
of the total U.S. population ages 18 and over. Results of any sample are subject
to sampling variation. The magnitude of the variation is measurable and is
affected by the number of interviews and the level of the percentages expressing
the results. In this particular study, the chances are 95 in 100 that a survey
result does not vary, plus or minus, by more than 3.1 percentage points from the
result that would be obtained if interviews had been conducted with all persons
in the universe represented by the sample. 

About Charles Schwab

The Charles Schwab Corporation (Nasdaq:SCHW) is a leading provider of financial
services, with more than 300 offices and 7.6 million client brokerage accounts,
1.5 million corporate retirement plan participants, 619,000 banking accounts,
and $1.3 trillion in client assets. Through its operating subsidiaries, the
company provides a full range of securities brokerage, banking, money management
and financial advisory services to individual investors and independent
investment advisors. Its broker-dealer subsidiary, Charles Schwab & Co., Inc.
(member SIPC, http://www.sipc.org), and affiliates offer a complete range of
investment services and products including an extensive selection of mutual
funds; financial planning and investment advice; retirement plan and equity
compensation plan services; referrals to independent fee-based investment
advisors; and custodial, operational and trading support for independent,
fee-based investment advisors through its Advisor Services division. The Charles
Schwab Bank (member FDIC) provides banking and mortgage services and products.
More information is available at www.schwab.com. (0809-10663) 



Edelman
Pablo Rodriguez, 415-486-3267
pablo.rodriguez@edelman.com
Jennifer McClellan, 212-704-4567
jennifer.mcclellan@edelman.com

Copyright Business Wire 2009

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