When you become a parent, you are more than willing to do whatever it takes to care for your child and give them the best life possible. For many parents, this means risking their own financial security to provide for the future of their kids. But what happens when you grow older and you no longer have a nest egg to fall back on? Chances are that you might risk becoming dependent on your adult children, thus weakening their financial security as well. So, here is the father’s day gift you give yourself: Financial security.
The good news is that you can end the cycle of dependency by focusing on your own retirement needs as a parent first. If you are thinking about putting your retirement savings on hold in order to raise money for your child’s future, you need to reconsider.
When it comes to children, most parents are giving and loyal, but in doing so, many parents have crippled their own retirement needs. If your wife has been a stay-at-home parent most of her life, what happens to her when you are gone and there is no nest egg for her to fall back on? Your children will be responsible for taking care of her, financially, in her golden years. This is the harsh reality for a lot of parent-child relationships. The sacrifice you make for your children may not always be worth the added financial pressure that comes later in life, when you haven’t established your own financial security.
With student loan debt on the rise, many newly-graduated adults are finding it hard to support themselves and pay off their debt at the same time. Thus causing them to move back home or asking parents for financial assistance. These boomerang kids have a huge impact on when, or if, parents can decide to retire comfortably. The reason being that providing continuous financial support to an adult child could mean putting your retirement savings and planning on hold, as well as risking the financial security of your child.
This may not seem obvious now, but your financial security when you retire is your child’s financial security too. Remember that children get access to lower rates and other help when enrolling to college or university, thanks to scholarship programmes, bursaries and student financial aid schemes. Students have more options to pay for their studies these days, and even if they have to apply for a student loan they can do so with low-interest rates, and have deferred payments until they graduate.
If you run out of money in retirement and become dependent on your children, keep in mind that aging parents can be more expensive than a student loan. Besides, chances are that you child has his or her own financial goals. They have to start their own family and save for their retirement. Don’t put added pressure on them to provide for you as well as for their own family.
Think of the long-term benefits that your children, and future grandchildren, will gain if you make your own financial needs a priority. They will be able to learn from your actions and take note of valuable life lessons, such as providing for yourself first, in order to adequately aid those around you.
Before you decide to sacrifice your retirement savings, think of the future repercussions it could have. The long-term results may not be worth the short-term gains. This father’s day, only you can give yourself the best gift of financial security. But if your children ask you for gift ideas, you should still request your favourite gadgets.