Many people are trying to compile a strong personal finance plan in order to prepare for everyday expenses. Meanwhile, there may be a growing number of people who are ambitious enough to try to make sure their children and grandchildren have enough money for their own financial futures.
Close to 70 percent of adults polled noted that they would like their funds to last through their children’s lives, according to a report from Merrill Lynch’s Private Banking and Investment Group. More than 40 percent noted that they want that money to continue to last through their grandchildren’s lives. Nearly one-fifth were hopeful that the funds would never deplete.
Money that is intended to last typically runs out two-thirds of the time by the following generation, the report noted. Nine in 10 of those who try to make funds exist for a while end up running out during the lives of their grandchildren.
“Most families don’t make the grade when it comes to preserving wealth across generations,” said Stacy Allred, managing director and wealth strategist for the private banking and investment group at Merrill Lynch. “This unfortunate reality can often be avoided by understanding pitfalls and developing a strategy. Determining the purpose of your wealth, including how long you’d like it to last, is a critical first step. With these insights, you can establish certain safeguards and back into a spending rate that may not deplete the family assets.”
Americans aim to save more for college
While many adults are trying to ensure that their finances last for future generations, some are trying to further aid their children with expenses. More than half of American parents are in the process of saving for their child’s education, according to a report completed jointly between Ipsos and Sallie Mae. The average amount of money saved reached $3,398 this year, on average. In 2013, the figure was nearly 30 percent less than that level.
“The recession tested family finances but parents never wavered from their commitment to help their children pay for college,” said Charlie Rocha, senior vice president at Sallie Mae. “Parents today have a renewed spirit of financial optimism giving them the motivation to increase their college savings fund and get back on track towards their goals.”
A total of 50 percent of parents felt that they had a specific plan in place to deal with tuition, the report added.