They call it the “boomer boomerang” – adult children of retiring baby boomers who continue to rely on their parents for their financial needs. Unfortunately, continuing to support grown children can have a significant detrimental effect on boomers’ savings and retirement plans, according to a Wall Street Journal article yesterday.
To avoid having your adult children jeopardize your financial future, financial planners recommend the following:
No blank checks. While you may be able to help your children out here and there, don’t make it a blank check. Be sure you can pay your own bills before you cover theirs.
Establish limits. Let your children know exactly how much you can comfortably provide, and set a time limit on when the support will stop.
No guilt. Parents often feel guilty when they have to say no, but you must be honest with your adult children about how you are putting your own retirement at risk.
Reassess goals. Reassess your own financial goals and develop a new financial plan to stick to them, even if that means cutting off the support at some time.
Make them accountable. Make your children accountable for their finances; unless you do, they are liable to make the same mistakes over and over.
Of course, the best way to avoid having adult children depend upon you for financial help is to educate them when they’re young about the importance of saving and budgeting as well as self-reliance when it comes to paying their own way in life.
Help is available to you by contacting your Southern California financial planning experts today.