Key Point
- Without a nest egg in retirement, you could struggle with your bills later on.
- If you’re falling behind in retirement savings, you should aim to provide non-financial support for your adult children.
Social Security pays the average beneficiary about $22,000 a year. Now, that number could go up over time. But either way, planning to retire on Social Security alone is generally not a good idea. .
However, many struggle to build retirement savings during their careers. For some, other bills get in the way, such as expensive mortgages. But if you’ve been shorting your retirement savings to help financially support your adult children, you’re in good company.
In a recent survey by Retirement Investments, 19% of respondents said they sacrificed their retirement savings to help their children. But it’s really not a good thing.
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As parents, it’s natural to want to help our grown children as much as we can. And if you have a lot of money to hand out, sure, if they’re struggling to keep up, why not help them pay the bills?
But the problem is that many pre-retirees need all the help they can get when it comes to building nest eggs. If you’ve been doing it, it’s time to break that cycle.
Not only will you struggle financially if you retire without a big enough nest egg, you may end up having to ask your children for help.
You can help in non-monetary ways
If you need to significantly increase your retirement benefits, you’ll need to stick to a tight budget and do everything you can to create more room for savings. Also, stop giving money to your grown children to help pay the bills.
That doesn’t mean you shouldn’t help them get back on their feet financially. One option worth considering is allowing your grown children to live in your home rent-free for a period of time. That way, they can accumulate some savings, pay off any debt they may have incurred during college, and move out once they’ve settled into a decent-paying career.
If you are partnered, married, or have children of your own, you can even allow your grown children to live in your home. Maybe not. But it may also benefit you financially.
Having grown children under a roof means they can help out more with home repairs and maintenance, thereby saving money. You save money because you don’t have to. It can be a win-win situation where you can focus on your retirement savings for a limited amount of time and avoid running out in the end.
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