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How to Avoid Becoming a Financial Burden on Your Kids

Haven’t saved enough for retirement, or your long-term health? Those costs could be passed on to your kids. Here’s how to make sure that doesn’t happen.

by Dori Zinn | September 2, 2021
<p>Teen Kissing Her Mother On The Forehead In Living Room</p>

The Squeeze

  • You can avoid becoming a financial burden on your kids by making long-term plans for you and your family.
  • This means saving for retirement as early as possible and as much as you can, even if it means your children pay their own way for college.
  • Talk about money with your family frequently and what could happen in case of an emergency. 

No parent wants to rely on their kids for things they’ve always done themselves: cooking their own meals, driving their own car, spending their own money. But what happens when we can’t do the things we once handled perfectly well? 

For the unprepared, the answer can be a costly one.

Sometimes older parents become financial burdens on their kids without ever noticing it creeping up on them. But it doesn’t have to be this way. Here are some money moves to consider making now to ensure your future financial wellness — and that of your kids.

Don’t ignore retirement funds

Putting off saving for retirement to help pay for your kids’ college education is certainly commendable but it’s also a risk to your future financial security. The student loan debt crisis is very real; however, as the experts say, you can’t borrow for retirement, you can only save and invest.

Instead, educate your children on finding free money options, whether through grants or scholarships. You can also explain to them the cost of college and be open about how, as a family, you can make it work. Avoid taking out Parent PLUS Loans since they don’t offer the same federal protections as other student loans. (Notably, they’re not eligible for income-driven repayment plans.)

Maximize your retirement fund contributions and, if available, take advantage of matching employer contributions. The more you can save now, the less likely you’ll become a financial burden later in life.

Don’t ignore your body

Putting off preventative care appointments only increases the cost of medical care later on in life when issues arise. If you neglect your wellness, you may be forced to pay for your sickness. So instead of ignoring your body, put it at the forefront of everything you do. Stay up-to-date on doctor’s appointments, including physicals, screenings, and regular blood work.

If you have the means to save a little more, keep a separate account for potential health-related costs. Medicare won’t kick in until you’re at least 65, and even then, you’re still on the hook for premiums and other fees. 

Putting off preventative care appointments only increases the cost of medical care later on in life when issues arise. If you neglect your wellness, you may be forced to pay for your sickness. 

Medical costs are one of the most significant expenses for older Americans, which could be one of the major reasons you turn to your adult children for financial support. By taking care of your body now while you still can, you’ll avoid using your children as a crutch later in life.

Consider long-term care insurance

Long-term care needs are different for everyone. For some, it might be having a home health aide. For others, it might be living in a nursing home. What region you live in also matters to the total cost of care. For instance, the price of a semi-private room in a nursing home is $5,019 a month in Texas; in Alaska, it’s $37,413 a month.

The cost of long-term care can get well into six figures, which is why you should think about buying long-term care insurance. While this might be something you don’t think about until you’re closer to retirement age, make sure you can afford the new payments by saving for it now. Remember to go based on what you can reasonably expect as you get older. For rapidly deteriorating health concerns, you might need a nurse in your home at all times or to move into a nursing home. For others, you might be okay with someone who handles simple homemaker services. 

Stay in constant communication

Burdens come in all shapes and sizes — as in financial but also emotional and physical. Keeping your kids in the loop about your income, expenses, and health is important. You aren’t hurting them by sharing health- and wealth-related stories. You’re keeping the lines of communication open.

That said, it’s also a good idea to talk regularly about money. While many families still find the topic taboo, your kids should know how much money you make and where it goes. Make sure they know where to find important documents, banking passwords, and other important information. This openness covers you and your family in case anything catastrophic happens.

Plan for the worst

Not to be downer but it doesn’t hurt to take a moment to consider the worst scenarios that could happen to your family. What can you do now to prepare for it? Here are some examples and ways you can take care of concerns before they arise.

What if I die younger than I expected?

Set up a will or trust and keep it updated as often as changes take place. Have an estate plan, along with an executor and trusted legal team. Always keep your family aware of any developments of your end-of-life plans, even if it feels morbid at the time.

What if my partner dies early?

If your partner earned the majority of your family’s income, this could be a massive blow to your current standards of living. Make sure you have a good life insurance plan in place that covers major expenses for the time being, whether that’s funeral arrangements, mortgage payments, or even an income for you.

The type of life insurance plan that’s right for you depends on your circumstances and budget. You may want to check with your employer to see if they have any offers. If you’re unsure where to turn, talk to a financial planner or another expert about what to do next.

What if my kids need money?

If you have extra cash that isn’t already earmarked for retirement, you can use that cash to help your child out. You may want to gently mention how to earn more money, whether through finding a new job or a side-hustle to cover those costs. If it’s an emergency, go over a repayment plan that fits everyone’s needs. 

If you’ve begun caring for your own parents — whether by chores, medical appointments or even their finances — you know how much time, effort and cost such caregiving can require. The best gift we can give our kids is to map out our own elder years as clearly as possible. Take a few steps forward on your planning today and they’ll be glad you did.

About the Author

Dori Zinn has been covering personal finance for more than a decade. Her work as been featured in The New York Times, Forbes, Yahoo!, CNET, and more. She covers credit, debt, budgeting, investing, college affordability and other topics to help people learn about money.

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