One of the hardest balances to strike as a parent is when to step back and let your children create their own independence. Even when they grow into adulthood, they are still our kids. Wanting our children to be successful adults in today’s world means many parents are working to save for retirement while still providing for their children financially. If you are in this boat, know that you are not alone. A 2018 survey conducted by Merrill Lynch found that 79% of US parents provide financial support to their adult children, from groceries and phone bills to weddings and down payments on their children’s first homes. But at what cost?
Are you sacrificing your own future financial security for your children right now?
The good news is that there is such a thing as balance and this applies to your finances and family as well. Parents are well advised to begin by educating their children on budgeting, investing, the value in making their payments on time, and not using credit to buy things they want but don’t need. These lessons can be helpful at any age and as more millennials are leaving home later, parents have the opportunity to be a financial role model for their children and show them how to take concrete steps for monetary success.
Retirement will come whether you have savings or not, but there are ways to walk the tightrope of still providing for your children after they fly the nest, without creating a sense of entitlement or bankrupting your account. Contribute to your child’s savings, be clear on whether any money you provide is a gift or a loan with clear repayment terms for everyone involved, establish a purpose for the money, and timelines for how long you will you provide financial support – all of these ways can successfully allow you to help your kids without bankrolling them indefinitely.
Estate Planning is another valuable tool to ensure your money protects your heirs in the future. You can, for example, set up a trust for the benefit of your children into which other relatives can place money, perhaps to fund their college education. Or what if your child is twenty-five but still sits at home all day playing video games? You may want to create a trust that provides for them while still encouraging them to get a job and become an active part of the community. Not all trusts are the same and we want to help you understand the difference!
Our licensed attorneys can help you create a plan that protects your legacy and your children. Not just with the distribution of assets, but by relieving them from having to make potentially life-changing and difficult decisions in the future. Providing for your children financially is just one piece of the puzzle as a parent. To truly protect yourself and them you need to create a well rounded estate plan for the future, one that encompasses retirement and beyond. Attend one of our FREE seminars and a licensed attorney can answer all your questions about the future and doing what is best for your family.