10 Ways to Support Family Members Without Risking Your Retirement
Do you have that one person in your family who always comes to you for money? It seems like the more financially stable you are, the more likely you are to get asked for handouts. And when it comes to family, saying no can be extremely difficult.
A recent study shows that 62 percent of people over the age of 50 provide some type of financial support to family members. This statistic proves just how hard it can be to set firm boundaries with the ones you love.
But if you let them, your family can threaten your nest egg in the same way inflation and stock market risk can – unless you plan for it.
Many people look for help after a situation has gotten out of hand. But instead of searching “financial groups near me can you help,” be proactive and plan ahead.
PAX Financial Group has helped hundreds of families with their financial planning needs, including many who find themselves in the “sandwich generation” and others who want to support their children until they’re, well, no longer children anymore. In our experience, we’ve come up with 10 ways you can support your family without risking your retirement.
Ready to have a real conversation about your future? Contact PAX Financial Group to see how we can help.
1. Talk to Your Financial Advisor
At the end of the day, it can be very hard not to help your loved ones – especially when you see them struggling. That’s why it’s so important to talk to your financial advisor.
Before you hand over any money to your family members, ask your advisor how this gift would affect your retirement plan. You can also discuss how you should handle this situation moving forward. If giving isn’t in your plan, your advisor may recommend something you would never have thought of on your own.
2. Invite Family Over for Meals
Helping family members may not necessarily mean financially. Stay in touch with your family by regularly inviting them over for dinner. Carve out one-on-one time during these gatherings where you can check in on them and discuss any financial issues they may be experiencing. How are their jobs going? Are they happy? What challenges are they going through? Offer emotional support and let them know that you’re there for them.
3. Offer to Babysit Your Grandkids
Even though you’re retired, if you’re a parent, you probably remember the hustle and bustle of what it’s like to have a full-time job and raise a family at the same time. Many in this situation feel pulled in every direction.
If possible, offer to lighten your kids’ loads by babysitting. Not only does this give you one-on-one time with your grandkids, but it can help your adult kids save on childcare costs. Plus, you can create memories that your grandkids will go on to cherish for a lifetime.
4. Set Up a College Fund
Your adult kids may put saving for their children’s college on the back burner as they deal with everyday financial demands like paying the bills and contributing to their own retirement plans. If you have the financial means, consider starting a 529 college savings plan in your grandkids’ names. Or contribute to an existing plan.
5. Help Relatives Gain Control of Their Own Finances
If you know a relative is struggling to gain control of his or her own finances, you can offer to help, but not necessarily on your dime! Encourage them to meet with a financial advisor. Show your relatives how to build an emergency fund. Explain the importance of paying down debt.
By helping your family members develop good financial habits, they can learn to stand on their own two feet – and they’ll, hopefully, be less likely to need your help in the future.
6. Give Away Family Heirlooms
If you can’t afford to give money, consider passing on family heirlooms or anything else that may be of value. Do you have a necklace that’s been in your family for three generations? Maybe you can pass it on to your granddaughter. Is there an antique piece of furniture you never use? Maybe you can pass it on to your sister who never stops talking about how much she loves it. If you can’t part with the item now, make sure you include it in your will.
7. Set Firm Guidelines
If you don’t want to cut your family members off cold turkey, give them conditions when you do help. For example, if your children are struggling and want to move back home, have a talk with them before they move in. Set a clear date for when they’ll move out, and discuss how they’ll contribute to the household.
If someone asks for money, make it clear that it’s a loan and set a firm deadline as to when you should be paid back (and add interest if you’d like). Or tell your family member that the money is a gift, but you’ll take it out of their inheritance later on. By setting these firm boundaries now, they can learn to be more responsible with their own money.
8. Be Honest
Your family may not know they’re setting you back financially if you don’t openly communicate with them. You don’t have to tell them everything about your finances, but you can give them a peek into your situation. Explain how giving them money has forced you to dip into your 401(k) a little early, drain part of your emergency fund or take out a new loan. This may be a difficult conversation, but they should know.
9. Ask Your Siblings for Help
Many retirees are in the sandwich generation, where they’re helping aging parents while still providing financial support for their kids and grandkids. If you’ve taken on the role of caring for a parent, don’t be afraid to ask your siblings for emotional and financial support. Could they call your parents twice a week and encourage them to eat healthy and stay active? Could you all split the financial costs up equally so it doesn’t just fall on you?
10. Don’t Feel Guilty
At the end of the day, never feel guilty about setting boundaries to protect your wealth. You only have one shot at retirement. There are no re-dos or second chances. You must do whatever it takes to retire comfortably without having to worry about running out of money.
Learning to support your family without opening the checkbook may be hard at first, but take comfort in knowing it’ll get easier. Each time you set firm boundaries, you can teach them how to manage money on their own.
How We Can Help
At PAX Financial Group, we’re passionate about helping retirees support their family members without risking their own retirement savings. If you’re in the San Antonio area and are looking for financial groups near you, contact us today.
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