LoveFamilyMoney: Shifting Structure of the Modern American Family Reveals New Challenges for Financial Security

  LoveFamilyMoney: Shifting Structure of the Modern American Family Reveals
  New Challenges for Financial Security

 Landmark Allianz Study Exposes Difficulties Faced by Nontraditional Families

Business Wire

MINNEAPOLIS -- May 21, 2014

Despite a stronger economy, today’s American families, and in particular
“modern” families with a nontraditional structure*, are struggling in ways
never seen before. Even though 85% of the more than 4,500 Americans polled in
LoveFamilyMoney,** a new Allianz study, identify themselves as “middle
class,”—a status that has traditionally afforded a level of financial
security— a staggering 57% of modern families say that they are either "making
ends meet," “struggling financially,” or "poor," a full 10 percentage points
higher than their traditional family counterparts. Moreover, 49% of modern
families say that they currently live paycheck to paycheck, versus 41% of
traditional families, and 25% are not saving any money at all.

The Allianz LoveFamilyMoney Study was designed to seek insights into the
financial needs of today’s families, which have reached unprecedented
diversity. Today, just 19.6% of U.S. households are married heterosexual
couples with children, a big shift from the 40.3% of traditional families
counted in 1970. The study revealed surprising differences in the financial
security of traditional versus modern families, providing the financial
services industry with compelling evidence of the need to tailor products to
the needs of specific family structures.

“The American family has changed considerably over the past 40 years, yet
little has been done to examine the evolving and differing needs of the
‘modern family,’” said Gary C. Bhojwani, member of the Allianz SE Board of
Management. “The Allianz LoveFamilyMoney  Study explores these new family
structures and the unique dynamics that affect people’s relationship with
money, improving the way the financial industry can support the needs of all
Americans.”

In the LoveFamilyMoney  study, Allianz identified seven distinct family
structures, or cohorts, one being the traditional family – those married to
someone of the opposite sex with at least one child under 21 living at home
who do not fall under one of the modern family cohorts below. The study also
looked at six other modern family cohorts:

  *Multi-Generational Families—Three or more generations living in the same
    household
  *Single Parent Families—One unmarried adult with at least one child under
    18
  *Same-Sex Couple Families—Married or unmarried couples living together with
    a member of the same gender
  *Blended Families—Parents who are married or living together with a
    stepchild and/or child from a previous relationship
  *Older Parent with Young Children Families—Parents age 40+ with at least
    one child under five in the household
  *Boomerang Families—Parents with an adult child (21-35) who left and later
    returned to rejoin the family

Financially Disconnected Modern Families

“New family structures have a direct impact on a family’s relationship with
money and finances—and we found that, while modern families have similar
strong emotional ties, they often feel financially less secure than their
traditional counterparts," said Katie Libbe, Allianz Life vice president of
Consumer Insights. "While family structure plays a prominent role, our study
of these different modern family cohorts uncovered a number of unique insights
into each group’s attitudes, perceptions and beliefs around money and
financial planning."

Just 30% of modern families felt a high level of financial security, versus
41% of traditional families. The split becomes more pronounced when looking at
financial hardships. Nearly 36% of modern families have collected
unemployment, versus only 21% of traditional families. And 35% of modern
families have unexpectedly lost a main source of income, compared with 23% in
the traditional category. Moreover, twice as many modern families have
declared bankruptcy versus traditional families (22% compared with 11% of
traditional families).

Modern families also struggle with their financial futures. Only 34% of modern
families believe that they have “excellent/above average” financial planning
knowledge/expertise, compared with 44% of their traditional counterparts. And
only 51% of modern families (versus 60% of traditional families) think that
they are on track to achieve their financial goals. The reason? Fifty-eight
percent of modern families say that covering current expenses takes priority
over planning for the future.

Open and Encouraging, Yet Unwilling to Seek Help

Despite the challenges they face, today’s modern families are in fact striving
to achieve financial success and more of them openly talk to their children
about their personal financial situation than do traditional families (54%
versus 47% of traditional families). Moreover, 47% of modern families have
actively encouraged their children to invest and save for their own retirement
goals, compared to only 38% of traditional families. Yet despite this
encouraging and open environment, they’re unlikely to rely on professional
assistance to build their own financial plan. Less than half (43%) of modern
families say they have ever used a financial professional versus 53% of
traditional families.

This lack of professional guidance may be a factor in the way many modern
families approach financial planning. More than a quarter (26%) said they
"don't make enough money to think about financial planning for the future,"
versus 18% of traditional families. Nearly a third (31%) say they have "too
many expenses and/or debts to pay off before I can think about planning for
the future," compared to about a quarter (26%) of traditional families.

“Although the overwhelming majority of American families have experienced
financial stress in recent years, potentially affecting their ability to meet
their financial goals, it’s clear that modern families have other unique
factors impacting how they approach and think about financial planning,” said
Bhojwani. “As an industry, we have a historic opportunity to help guide
Americans on a path to financial security, and this study provides critical
insights toward that effort.”

Delving Deeper into Family Structure and Finances

In the coming months, Allianz will release additional data from its landmark
LoveFamilyMoney  study. Topics will include, among others:

  *Another place at the table—How unexpected family additions trigger seismic
    shifts in financial well-being and connectedness.
  *Financial codependency—The modern family’s emotional-financial tug of war.
  *A unique approach—Financial planning strategies for today’s modern
    families require a different approach.
  *The wealthy poor—Modern families struggle to balance short-term wants with
    long-term security.

About Allianz

Allianz has been providing financial services through its affiliates in the
United States since 1896. We offer world-class expertise across a wide range
of financial services, from active asset management to innovative solutions to
help grow and protect income in retirement. As a leading global financial
services company with more than 147,000 employees in 70 countries, we're proud
to make a difference in the lives of our more than 83 million clients
worldwide each day. To learn more about Allianz, visit us online at
http://www.allianzusa.com.

*Traditional families are defined as families where the spouse is married to
someone of the opposite sex with at least one child under 21 living in the
household; No stepchildren, no adult child who returned home, and no one else
besides spouse/children living in the household.

**The Allianz LoveFamilyMoney Study was conducted by The Futures Company via
an online panel in January, 2014 with more than 4,500 panel respondents ages
35-65 with a household income of $50K+ and was commissioned by Allianz.

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Contact:

Allianz
Sara Thurin Rollin, 763-765-6703
sarathurin.rollin@allianzlife.com
 
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