Boomers Put Family First, Often To Their Own Financial Detriment

7:56 pm Asset Protection, Estate Planning, Retirement Planning

boomer couple 150x150 Boomers Put Family First, Often To Their Own Financial DetrimentA new study from Ameriprise Financial says that baby boomers are providing financial support for family members in spite of their own uncertain financial futures.

The Money Across Generations study found that boomers are getting squeezed from both ends — 93 percent have provided financial support to their adult children, and almost 60 percent have helped aging parents financially.  In addition, the study found that more than half have allowed their adult children to move back in with them rent-free.

Most boomers are failing to realize the impact all this financial support is having on their retirement goals, with only 10 percent reporting that helping parents has slowed down their retirement savings and 34 percent saying the same for helping adult children.

Ameriprise recommends that boomers ask themselves four questions before providing financial support to a family member:

1. Is this a want or a need? When it comes to living expenses, there is an important difference between a true need and a perceived need. If the expense isn’t a basic need, or if you’ve assisted with the same expense in the past, ask yourself if you are enabling irresponsible financial behavior.

2. Is this a loan or a gift? Consider whether your family member’s circumstances or past behavior indicate that they’ll actually be able to repay you. Also ask yourself whether you’ll be okay – financially and emotionally – if they don’t.

3. What are my motivations and expectations? Consider your own feelings and ask yourself if you’ll resent your decision – or your family member – in the future.  If your expectations aren’t met, will you be disappointed? If so, it may be better to say “no” than risk damaging your relationship.

4. Will this affect my own financial well-being? It’s crucial to take a look at your short- and long-term goals and ask yourself if you can really afford to help. It’s natural to want to provide support, but don’t let a struggling family member jeopardize your own financial security, especially if you’re approaching retirement. By prioritizing your own financial goals and stability, you may even have the ability to comfortably help family members in the future.

Let our Costa Mesa law offices help you get started by contacting us today.

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