Much of the work you do saving and investing is to ensure you and your family can enjoy life without having to constantly worry about money. But no matter how well you plan, certain situations can arise that throw off that balance and truly test your priorities.
In this episode of the Money Wisdom podcast, we’re going to look at a handful of these challenging scenarios that face many retirees and pre-retirees and share the way we approach these with our clients.
The first scenario we discuss is one that’s becoming more and more common today. Parents are having to take financial care of their children well into their 20s in many cases and that can put a huge strain on bank accounts. If there’s a situation where kids are blowing up the financial situation for a family, then we’ll let a client know. Our job is to point out the potential consequences to supporting your children at the detriment of your own retirement so that you can make the decision that’s best for you. It’s always our goal to help make sure you have enough money to take care of yourself first and if you don’t have that, it might be best to cut back on how much you’re providing your kids.
Similarly, many people are having children much later in life, which eventually presents another difficult scenario. By the time you’re about ready to retire, there’s a good chance your children are still in college and you’re helping fund that education. You’re going to have to make some tough decisions here and it’s not always easy, but consider the time you have to recoup that money for your retirement versus how long they have to pay off that debt,
Speaking of education, grandparents like to help out when it comes to college and ask us how best to do that. There are two choices that make a lot of sense in this situation. The first is to write a check and pay for tuition directly because that’s not considered a gift as far as the IRS is concerned. The other great option is to open a 529 plan and start contributing to that. As long as the beneficiary uses it to pay for education, the growth in that account is tax-free.
Now let’s reverse this a little bit for our next scenario. We work with clients that are part of what’s called the ‘sandwich generation’ because they’re having to support not only their children but also their parents. When you have the responsibility of providing support to your aging parents, there are emotional decisions to go with the financial ones. Financially, the best advice again is to make sure you’re prioritizing your own needs to make sure you don’t go bankrupt in retirement. Of course, everyone’s situation is different so we treat these on an individual basis.
The final family scenario we talk about on the show is the one where people want to have an intentional plan about leaving a legacy. This is so important to many people and you want to execute correctly so that the money is spent with your values and intentions protected. That’s why it’s advantageous to have a trust. It can give you flexibility, protection, and confidence.
Ultimately, you want to make sure you have a plan in place so that you can tackle these as they arise. Take advantage of our Money Map review and get that process started if you haven’t.
1:52 – About to retire but still helping children financially
4:17 – Putting off retirement to continue paying for a child’s college
5:52 – Grandparents that want to help grandchildren financially
9:20 – Aging parents that are counting on their children
11:58 – People that want to be intentional about leaving a legacy
13:54 – Do you have a plan yet for these?
“We always felt our financial needs were in very capable hands. Alex Angst is great to work with. Our advisor always made us feel he had our best interests at heart and explained things so we could understand them.”
“Working with Johnson Brunetti has had a positive impact on my life by providing me with the knowledge, confidence, and peace of mind to move forward with my retirement plans. The process of getting to this point, through their guidance, has been informative and pleasurable.”
“I view your company as one that puts my interests first. I think that is very uncommon and very refreshing. “
“Matt does an awesome job! So easy to understand and he listens to our concerns and addresses them! happy I chose your firm!”
“I have been pleased with the help and service I have received from the company. I have met several team members on Eric’s team and have found all of them very well prepared to meet with me when reviewing my portfolio. I always feel that I am an important customer and appreciate that very much. I hope the firm continues to focus on the customer and maintains its great service. I think you do a great job for someone like me!!!! I’m happy I chose your firm!”
Investment Advisory Services offered through JB Capital, LLC.
Insurance Products offered through JN Financial, LLC.
Atlanta • Boston • Hartford | Tel: 800-208-7233
JB Capital LLC is a federally registered investment adviser under the Investment Advisers Act of 1940. Registration as an investment adviser does not imply any level of skill or training. Information presented is for educational purposes only and is not intended as an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies.
Johnson Brunetti is a sponsor of WFSB Better Money, WCVB Better Money Boston, WSB-TV Better Money Atlanta, WTNH Money Wisdom, and WTIC Money Wisdom.