Key Point
- It’s natural to want to help your child financially.
- That’s fine if you can afford it, but you shouldn’t hand over the money you need for retirement savings.
- Find other ways to help your child, such as child support or providing temporary housing.
Being a parent doesn’t end when your kids grow up and leave home. Admittedly, at that point, I didn’t have to be as careful as I was when I was a toddler, worrying about going into the cutlery drawer or touching the hot oven.
However, the concerns that parents have for their children tend to remain with them throughout life. So even if your child is a full-fledged adult who ran away from the nest years ago, what can you do to help your child financially by helping pay the mortgage or handing out money when you can? may tend to
If you’re in the habit of providing financial support to your grown children, you’re not alone. A recent survey by Retirement Investments found that 55% of respondents say they support their adult children financially. I am answering But whether it’s the right move depends on your financial situation.
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I don’t want to risk my retirement
If you’re doing very well financially, maxing out your IRA or 401(k) each year, and have enough money saved for retirement, $200 monthly checks for your grown children Write and give them some breathing room. After all, you may be at a point in your career enjoying higher incomes and lower spending. So if you can easily afford to share your wealth, why not?
The problem, however, is that some parents sacrifice their retirement lives to support their grown children financially. So if you’re not in a position to be happy with the nest egg you’ve built, you shouldn’t be helping your grown children financially when you need to catch up on your retirement savings.
Imagine giving your kids $200 a month to help with the bills instead of putting that cash into your own IRA or 401(k). Do that for years and you could be in serious financial trouble when your career is over and your paycheck is gone forever.
Other Ways to Help Adult Children
It’s natural to want to make life as easy as possible for your children. And one way to do that is by providing financial support. But if money is tight or you need all your money to save for your old age, you should aim to help your children in ways that don’t involve writing monthly checks.
For example, if my schedule allows, I have the option of helping with childcare. This will save you money for your child. Another option is to allow grown children to return home for a period of time. Especially if your child is single and doesn’t need that much space. This way they can increase their savings and not have to spend their own money on bills.
Not providing financial support to a grown child when you can’t afford it doesn’t make you a bad parent. And you shouldn’t compromise your retirement to write these checks.
Retiring without saving enough can cost your children later in life. And that’s probably the last thing you want.
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