Are Your Kids a Risk To Your Retirement?

Are your kids a risk to your retirement? Many parents provide financial help to adult children. That assistance could impact your retirement.

A Preview: 
  • We share some interesting statistics
  • How it can impact when and how you retire.
  • In extreme cases, how it can deplete your nest egg.

Are Your Kids A Risk To Your Retirement?

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When you think about the financial threats to your retirement, what comes to mind? Most people would immediately answer a “stock market crash.” Others might say “a prolonged nursing home stay or health care expenses.”

Both of those are legitimate concerns.

Are your kids a risk to your retirement?

For most of us, money is a finite resource. Helping our kids financially means we sacrifice our own needs. For some, that could mean not taking a vacation or delaying the purchase of a new car.  For others, it could mean they don’t save as much as they should for retirement. 

Statistics, Lies and More Statistics

ARe Your Kids A Risk To Your Retirement

79% of parents with adult children provide some sort of financial support for their kids. This would include things like cell phones, car expenses, rent or paying on student loans.

Kids Risk Your Retirement

Parents of 18-34 year olds spent twice as much on their kids as they added to their retirement accounts. 

Kids Risking Your Retirement

On average, parents spend about $7,000 per year helping their kids. This amounts to over $500 billion dollars annually.

Helping Your Kids Can Impact Your Retirement

For many, not saving enough for retirement can translate into working longer— if you can.
But, working longer may not be possible. Many Americans retire early because they have to. Lower Social Security benefits and a smaller nest egg create a difficult situation. Your lifestyle in retirement may suffer.

Could Your Kids Cause You To Run Out Of Money?

Over the past two decades, we can point to a handful of real life examples.  The extra income taken to help children was the primary reason a few clients saw their accounts go to zero.  These were extreme situations, but the outcome was not ideal.

Set Healthy Limits

There is nothing wrong with helping your kids.  My wife and I have adult children, and we have helped them at various times. And, if necessary, we will help again.  

You need to set a healthy limit to the assistance you provide.  Your retirement savings comes first.   If you are concerned about what is reasonable, check with a trusted professional.  They can provide an objective viewpoint to help you make a good decision.  

And if you aren’t working with a financial planner, we would welcome the opportunity to talk to you.  Click here to arrange a complimentary consultation.

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Financial Planning

Neal Watson is a Certified Financial Planner™ Professional and a Financial Advisor with Fleming Watson Financial Advisors  He typically works with people who are planning for retirement.  Fleming Watson is a Registered Investment Advisory firm located in Marietta Ohio.  Our firm primarily serves Marietta, Parkersburg, Williamstown, St. Marys, Belpre, Vienna and the surrounding communities in Washington and Noble Counties in Ohio and Wood and Pleasants county in West Virginia.

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