How many times have you heard “I will start saving for retirement once I get my kids through college”? I hear it at least once a week from prospective clients that have fallen into the trap of believing their personal finances will loosen up after their kids have graduated. What happens when the children you put through school move back home after graduation? What if at the same time, your parents continue to age and need more of your time, energy, and money?
I recently spoke with Penelope “Penny” Wang, Editor-at-Large of Money magazine about this financial dilemma facing an entire generation of clients. I told her that clients may be able to handle taking financial responsibility of their adult children or parents, but very few can handle both:
“When it’s both, it gets overwhelming,” says Milwaukee financial planner Alan Moore.
So what can you do about it? What happens when they really do need your help, but you aren’t able to fully support them? If adult children are moving home, or need financial support, I recommend that clients put EVERYTHING is writing. Be sure they understand the expectations upfront, and that everyone is on the same page, so there are no surprises. I told Penny about a client once that didn’t follow this advice, and ended up doing the unthinkable to try and get their life back:
One of Moore’s clients ended up buying his son, who hadn’t moved out, a house. “He told me, ‘I just wanted my house back,’ ” says Moore. ”I’m not sure he could really afford it.”
The truth is, the client couldn’t afford to give their son a home, but they felt it was their only option.
Click here to read the full article.
So what do you think? Are you taking care of adult children and aging parents? How are you able to manage all of the bills? Have you been able to keep saving for your own retirement? I would love to hear your story, or any questions you may have!
Alan Moore is the founder of Serenity Financial Consulting. He is a Certified Financial Planner (CFP) and a Certified Retirement Counselor, author of the Serenity Financial Consulting Blog, and a featured contributor here on the California Institute of Finance blog.