Being a generous parent is usually a good thing.After all, most of us want to help out our kids as much as we can, especially when theyre first starting out on their own.But this 2019 article on the Bankrate website pointed out a darker side of parental generosity: a significant number of parents are allowing their own generous impulses to put their retirement security in jeopardy.
Considering that the current coronavirus pandemic may be prompting you to provide more financial support to your adult kids, we felt it was timely to bring this article back for your review and consideration.The message: temper generosity with healthy caution.Helping Your Kids: How Old is Too Old?Parents are responsible for taking care of their children, Bankrate reports, and that means emotionally, physically and financially.But how old is too old to be receiving money from mom and dad? A new Bankrate survey on financial independence looked into the average age Americans think individuals should start paying for their own bills, including car payments, cell phone bills and student loans.
The article is based on a survey of more than 2,500 adults commissioned by Bankrate and conducted in the spring of 2019.The first portion of the article answers the question, At what age do you think a person should start paying for various expenses on their own, getting less and less help from mom and dad.This part of the article, which we found reasonably interesting, generally concluded that the higher the expense, the more people expect the parents to keep on helping.Most of the results dovetailed the traditional mindset that 18 is the golden age of adulthood except when it came to big-ticket items, the article reveals.Survey responses ranged from paying ones own cell phone bill (age 19) to car payments and car insurance (age 20) to housing costs (age 21) to student loans (age 23).
Respondents generally agreed that, as kids age into their 20s, they should be footing more and more of their own bills and relying less and less on the folks.Sounds good to us except that the rest of the survey suggests thats not whats happening.Helping Your Kids but Sacrificing Your Future Security: Not a Wise StrategyThe most alarming finding of the survey isnt that parents are helping their adult children, says Bankrate its that the majority of them say that helping is hurting their financial futures.In total, 50 percent of respondents say they have sacrificed or are sacrificing their own retirement savings in order to help their adult children financially.To corroborate this statement, we found this article from the Motley Fool website that put the problem of parents sacrificing for their adult kids in perspective.
Just because kids have reached adulthood, does not mean they stop being a financial burden on their parents.Nearly three in four parents with adult children say they help their grown kids with their finances, Motley Fool reports.A large number, 84 percent, have helped their kids with living expenses, and a slightly smaller number (70 percent) have given kids money to pay down debt.
This type of aid walks a fine line between being the right thing for a parent to do and setting children up for future problems, warns the article.Helping Your Kids: How Much Sacrifice is Too Much?According to the Bankrate survey, while half of all parents say that helping their adult kids has damaged their own retirement savings, about one respondent in six says theyve sacrificed a lot, suggesting real concern about retirement preparedness.That concern is probably justified.The retirement crisis in America is an ongoing worry for Americans, the article states.
As companies have shifted away from offering traditional pension plans to employees, much of the responsibility in planning for financial life after work now relies heavily on individuals.Unfortunately, some are struggling to keep up.Earlier in 2019, another Bankrate survey found that more 20 percent of working Americans arent saving any money at all, mostly due to high debts and reduced income.(That dismal statistic includes savings for retirement as well as for emergencies.) For a country where many people are already struggling to navigate their financial futures, Bankrate says, the data isnt encouraging.
Certainly the fallout from the COVID-19 pandemic will only make things more precarious for many retirees and near-retirees.Helping Your Kids Grow Up!According to the Bankrate article, some experts suggest that helping your adult children out by footing their bills often does more harm than good.At the very least, parents who are sacrificing their financial futures for their adult children should reevaluate their assistance.While its true that parents may feel awkward and intimidated to force their adult kids off the parental gravy train, having the conversation sooner rather than later is essential.As one relationships expert put it, the longer the conversation is delayed, the more likely it becomes for resentment to start building from both parties, especially the parents.
She urges parents to decide what works best for them and then lay out the facts honestly.In any case, youre not helping your kids by delaying their entry into adulthood, and youre not doing yourself any favors, either.The Real Key to Helping Your Family: Create an AgingOptions LifePlanWhen it comes to retirement planning, most people focus on one fairly narrow issue: money.Financial planning is an important component of retirement planning.
But people heading towards retirement often make the mistake of thinking that a little financial planning is all thats required, when in fact most financial plans are woefully inadequate.This article describes the urgent need to plan ahead for your senior housing needs, but too many ignore the housing issue entirely until the family is forced by a health crisis t0 make a snap decision.Speaking of medical coverage, will yours be adequate, or will that health crisis knock your financial plan off course? Are you adequately prepared legally for the realities of retirement and estate planning? And is your family equipped to support your plans for the future as you age? The best way we know of to successfully blend all these elements together finance, medical, housing, legal and family is with a LifePlan from AgingOptions.Thousands of people have discovered the power of LifePlanning and we encourage you to the same.Simply visit our website and discover a world of retirement planning resources.
Make certain your retirement planning is truly comprehensive and complete with an AgingOptions LifePlan.Age on!(originally reported at www.bankrate.com)
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