At a time when middle-aged couples should be saving for their retirement, many find themselves caught in the middle of competing financial needs from two generations. Having started families later than past generations, their children may just now be entering college or could still be living at home. At the same time, aging parents may require financial assistance.At a time when middle-aged couples should be saving for their retirement, many find themselves caught in the middle of competing financial needs from two generations. Having started families later than past generations, their children may just now be entering college or could still be living at home. At the same time, aging parents may require financial assistance.While you may have to allocate some resources to the needs of your parents and children, don’t forget your own retirement. At a minimum, consider the following:
• Calculate how much you need for retirement and how much you should save on an annual basis to reach that goal. Don’t give up if that amount is beyond what you’re able to save now. Start out saving what you can, resolving to significantly increase your savings once your parents’ or children’s needs have passed. Also consider changing your retirement plans, perhaps delaying your retirement date or reducing your financial needs.
• Take advantage of all retirement plans. Enroll in your company’s 401(k), 403(b), or other defined-contribution plan as soon as you’re eligible. Also consider investing in individual retirement accounts. All provide a tax-advantaged way to save for retirement.
• Reconsider your views about retirement. Instead of a time of total leisure, consider working part time at a less stressful job, starting your own business, or turning hobbies into paying jobs.
Don’t feel guilty thinking about your own retirement when your parents and children need your help. One of the best gifts you can give your children is the knowledge that you will be financially independent during retirement.
© Copyright 2019 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without the prior written consent of Thomson Reuters. Thomson Reuters and the Kinesis logo are trademarks of Thomson Reuters and its affiliated companies.
Disclaimer of Liability
Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability and fitness for a particular purpose.