The New Retirement Mindscape^®

One of the most surprising findings of the Ameriprise Financial New Retirement Mindscape study centers on the type of financial advice most valued by Americans. As it turns out, getting help to educate children about money was rated more important than receiving help with Social Security, pensions and health care benefits. In fact, 52 percent said the most important advice they could get from an advisor — if costs were not a concern — was "help to make my children more financially savvy."

The New Retirement Mindscape survey, fielded to 2,000 Americans ages 40 to 75 in August of 2005, is the first study to explore people's attitudes, worries, behaviors, ambitions and needs in retirement.

Ken Dychtwald, Ph.D. and CEO of Age Wave, who teamed up with Ameriprise Financial on the study said, "Boomers want the best for their kids and they know that pensions and other retirement benefits could soon be a thing of the past. So, it makes a lot of sense for boomers to want their children to become more financially savvy — not just for the kids' sake, but possibly to protect their own hard-earned retirement dollars."

Interestingly, the number of U.S. households with children over the age of 18 who still live at home has grown dramatically, rising by almost 70 percent from 2000 to 2004.* Some say that this startling statistic is evidence of a new reality — today's kids are taking a lot longer to assert their financial independence.

Research derived from the New Retirement Mindscape focus groups revealed that many parents of these young adults want to set a better example for their children when it comes to financial planning and money management. The baby boom generation, born 1946 to 1964, grew up during a time of relative economic prosperity. Boomers may not have had to lead their lives with the same kind of frugality and financial prudence that characterized their parents' generation, and some may worry that they have not instilled these values into their children.

Our focus group discussions revealed comments such as:

"I'm trying to carry over what I'm learning now to my kids so they don't make the same mistakes and end up where we are...which is not as secure with our retirement."

"Our kids don't know to how to get out in the world because we've spoiled them by giving them new cars and credit cards. We haven't raised them to know how to get out in the world and make money."

Craig Brimhall, vice president of Retirement Wealth Strategies for Ameriprise Financial, encourages parents to teach their children the importance of saving. One suggestion is to set up a so-called "family 401(k)" plan. Brimhall said, "Parents can reward financially responsible behavior by giving their kids a match on any money they set aside in a long-term savings account. It's what many employers do for their employees, so why not with families?"

Brimhall also advises individuals who may need to provide financial assistance to adult children, parents or other family members, to factor this into their retirement plan, just as they do rising healthcare expenses and inflation. Like these more typical planning variables, providing financial assistance to family members may affect how long their accumulated nest egg may last.

For more information on the Ameriprise Financial New Retirement Mindscape study, please visit ameriprise.com.

Financial advisory services and investments offered through Ameriprise Financial Services, Inc., Member FINRA & SIPC, an Ameriprise Financial company.

*SRIC-BI's 2004 - 2005 MacroMonitor