Today's Hack

What role do our kids or grandkids play in our retirement plans? A lot of people want to save for their children and help them with big expenses like college. Doing so is great, but you have to incorporate that into your plan.

If you have kids or grandkids, it’s important to think about how they will factor into your retirement plan. Maybe you want to help them with college, a wedding, or their first house. But you don’t want to sacrifice your own retirement for those expenses. That’s why having a plan and starting these conversations early on is essential.

College Expenses 

Maybe you had children later in life and now you are facing potential college expenses as you near the retirement red zone. You need to have this discussion with your children: Are you funding a portion of their school? All of it? What kind of loans are you taking out to help?

You have to be really careful and understand what risks there are to student loans. You can finance college but you can’t finance retirement. It’s great if you want to help the kids out, but you need to understand how it will factor into your plan without taking away from your financial future.

Trouble with the Job Market 

As kids are coming out of college, it seems that it’s harder and harder for them to find sustainable jobs. Student debt and having the kids back in the house can add up. Often times we put off these conversations and end up funding these expenses without a plan.

Expenses for the Grandkids 

When you start to have grandkids, you may want to save for them as well. Starting to save early will always be a great option. A lot of people start saving early for big expenses like college or a wedding. Maybe you’d rather build memories through family vacations instead of gifting money. It’s all going to depend on your goals and family.

Special Needs Expenses

Is there a child or grandchild you’ll be responsible for taking care of when you are in retirement? That’s certainly something you’ll want to consider when constructing your plan. You’ll need to figure out how much you’ll need to live off of and then how much it will cost to take care of them as well. How you set up your will and trust will be important too. There is a lot of information out there, so it’s important to have a professional help you.

Generational Wealth 

If you want to leave something behind for the family, you have to be on the same page with your spouse. Working with an advisor will help you strategize in the most efficient way possible. You can’t just set it and forget it either, keep your legacy plan updated. Do you want to pass everything on at once? How will the house be passed on?

Listen to the entire episode or skip ahead using the timestamps below. 

1:46 – College expenses

4:58 – Trouble with the job market

7:10 – Grandkid expenses

11:42 – Special needs expenses

14:12 – Generational wealth


A Quotable Moment:

“You might love to pay for your kids’ education… but don’t just jump into doing that without understanding what that looks like. ”

-Phil Putney

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