During the last five years, roughly three out of five Americans age 50 and older have provided financial assistance to members of their family, including adult children, parents, grandchildren, siblings, or other relatives, says a Merrill Lynch study released last month.

    Conducted in partnership with Age Wave, an Emeryville, Calif.-based age-research company, "Family & Retirement: The Elephant in the Room" is an in-depth study exploring modern family interdependencies and the challenges baby boomers, currently age 47 to 67, face in balancing them with their own retirement plans and financial security. Conducted in August, the study is based on a nationally representative survey of more than 5,400 respondents.

    The average financial assistance provided to family members during the last five years was nearly $15,000—and significantly more among the nation's wealthiest families. This support might have been to help relatives meet a one-time need or ongoing assistance over the course of many years and often was given without expecting anything in return.

    However, nearly nine in 10 people more than 50 years old haven't factored such support for family into their financial planning, the study findings indicate. The study also found what its sponsors describe as a dangerous absence of proactive discussion and establishment of safe boundaries among family members as they navigate these interdependencies.

    "Given the challenging economic climate during the past several years, it's not surprising that so many Americans have extended financial support to their loved ones," says Andy Sieg, head of global wealth and retirement solutions for Bank of America Merrill Lynch. "However, such admirable willingness to assist family members should not place one's own long-term financial security in jeopardy, and can be a hidden risk to retirement that must be considered and planned for."

    Nearly three in five people age 50-plus believe a member of their family is the "family bank," meaning someone who their extended family is most likely to turn to for financial help. This person is often the one who is most financially responsible, has the most money, or is the easiest to approach.

    Half of surveyed pre-retirees say they would make major sacrifices that could impact their retirement to help family members. Among those pre-retirees, 60 percent would retire later, 40 percent would return to work after retiring, and more than one-third say they would accept a less comfortable retirement lifestyle to help family financially.

    Those helping family financially rarely do so because they expect future help or payback. People age 50-plus are 20 times more likely to say they are helping family because "it is the right thing to do" than because "family members will help them in the future" (80 percent compared with 4 percent). Also, they are five times more likely to stop support because a recipient isn't using the money wisely than because of worries about being paid back (57 percent compared with 11 percent).

    This generosity extends to a shift in mindset regarding inheritance, with 60 percent of people age 50-plus saying they would prefer to begin passing on their assets during retirement rather than waiting until the end of life. Women age 50-plus are even more likely than men to feel this way (65 percent compared with 53 percent).

    Close to half of married retirees say their marriage is more fulfilling (48 percent) and loving (45 percent) in retirement, and just 11 percent say it is more boring or contentious. However, divorce is becoming increasingly common among older adults. One in seven people age 50 and older who were once married are now divorced and single—a seven-fold increase since 1960. Divorce in maturity, or "gray divorces," often creates substantial financial hardship, especially for women. After a divorce, average household income drops by more than 40 percent for women and by 25 percent for men.

    Blended families: Rising divorce rates, which peaked in the 1980s among all age groups and doubled between 1990 and 2010 among people age 50-plus, have contributed significantly to the rise in blended families. Nearly two in five people in that demographic are now part of a blended family. Nearly one-third of people age 50-plus with stepchildren say it complicates financial planning, a percentage equal to those who say they and their spouse have different financial priorities for their own children than they have for their stepchildren (32 percent).

    "Families are a major source of fulfillment during retirement years, but can also create unforeseen financial pressures," says Ken Dychtwald, founder and CEO of Age Wave. "Too often, people plan for their retirement without factoring in how they might be called upon to help out their adult children, aging parents, and siblings. In this new era of extended longevity and increased family interdependencies, retirement planning is no longer about just an individual or couple, but also about the needs and hopes of our loved ones."

    The study found that the vast majority of people age 50-plus haven't prepared for potential family events and challenges that could affect their retirement.

    One in five parents over 50 years old have at least one "boomerang" adult child who has moved back in with them. More than two-thirds of older parents have provided some form of financial support to their adult children during the last five years, and among that group 36 percent did so without knowing how their money was being used. Those parents who are aware of how their money is being spent say it's given to help adult children with their rent or mortgage (20 percent), cell phone bills (18 percent), car payments (17 percent), health care expenses (15 percent), and student loans (11 percent), among other things.

    Only one-third of people age 50 and older say they feel well prepared for retirement if everything goes as they expect. Less than one-quarter would feel prepared if their spouse died, a troubling statistic given that more than half of women over the age of 70 have been widowed and 14 percent of people age 50 and older are divorced.

    Fewer than one in four adults age 50-plus say they would be prepared financially if they or their spouse were forced to retire early because of a health problem, despite the fact that one-third of people in the U.S. who retire early do so for health reasons. While younger people consider cancer to be the greatest health-related worry of later life, older adults say Alzheimer's disease is the biggest worry; nearly half of people age 85 and older have Alzheimer's or related dementias.

    The study also found a significant lack of proactive discussion and engagement between family members on key financial topics, which can negatively impact various aspects of one's retirement and overall financial security.

    Seventy percent of adult children age 25-plus haven't had a discussion with parents about their retirement and other issues related to aging, the study findings indicate. And more than half of surveyed parents age 50-plus say they haven't discussed with their adult children any important financial issues, such as a will, health directive, inheritance plans, and where they plan to live in retirement. Furthermore, just one in four older adult siblings have discussed how their parents will be financially provided for, or cared for, as they get older.

    Across all relationships, the most common catalyst for such discussions is the death or illness of a family member or friend, and the top barriers for having an open conversation include fear of family conflict and the fact that such topics are uncomfortable to discuss. People who do have these discussions with family members are, on average, nearly twice as likely to say they would be well prepared financially if faced with a family challenge.

    "Proactive discussions and coordination with family members can be the difference between smooth sailing and significant hardship when confronting financial challenges leading up to and through retirement," says David Tyrie, head of retirement and personal wealth solutions for Bank of America Merrill Lynch. "Although many of these topics can be difficult to discuss, there is a clear benefit to having family conversations and planning ahead. We help our clients prepare for and work through such important issues, so that their families' needs are addressed and their goals can still be achieved."

    The survey included a nationally representative sample of about 5,400 respondents age 25-plus, including 2,104 respondents among the boomer (age 47-67) and silent (age 68-88) generations, 250 millennials (age 25-36), and 252 respondents among Generation X (age 37-48).

    In addition, select findings are based on an oversample of 2,809 affluent respondents age 50-plus with at least $250,000 in investable assets (excluding real estate).