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I have been challenged by Jonathan. Will he like my response? By RDQ

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AUTHOR: R Quinn on 10/16/2024

Jonathan asked what advice I give my children related to their retirement.

Our children are ages 54, 53, 50 and 49.

I don’t give our children advice about retirement planning or money and I don’t expect to ever be in a position to do so. But even if I was, giving any advice requires detailed knowledge of all the related facts which I don’t have.  I will do my best to answer a question if asked. 

We all refer to our children, but when children are married there is a very different dynamic. Parents are unlikely to have influence over spouses, nor should they try in my opinion. Getting involved can lead to disaster. 

Our daughter is married to a Wall Street executive who advises multi-millionaires on their investments. No chance I’m going suggest what she should do with her old IRA.  

Are our children saving for retirement? Two yes, two I have no idea – but have high hopes. 

Our children grew up in a house where there was daily discussion about pensions, saving, investing, health insurance, life insurance, etc. That was what my job was about and I fear I too often brought my work home. I know I talked a lot about the many issues I faced and the problems workers brought to me. The children heard a lot of horror stories. 

I can only hope they picked up a grain of wisdom over the years.

None of our children have pensions, two work two jobs because they were faced with health and finically crises when their spouse became seriously ill and unable to work. 

I also hope our children have learned something about managing money and debt from the examples Connie and I set. They don’t know the specifics of our finances, but they know how we live and that when we all go out to dinner “Pa” often picks up the tab. They also know we share a portion of our annual RMD with them. I told them that they may have to worry about us in our old age – that train has left the station – really old, old age, but it won’t be about money. 

The other day we were driving by a country club and I mentioned how I wish we could join one. Connie said, “ you could, if you weren’t so determined to leave money to your children.” Yes, guilty as charged. 

Should I drop a couple of hundred thousand dollars on a club membership and incur hundreds of dollars more in monthly expenses or do we give our children a better start in their retirement? That’s easy, this morning I am playing golf at the local county course for $45.00. 

When working I got to play the most exclusive courses in the Northeast – as a guest. I once played Trump National with Trump’s caddy whom I asked about Trump’s golf game – I’ll tell you what he said after the election. 

Our children have had every opportunity we could provide. Do we always agree with how they spend money? That’s irrelevant, none of our business. Do they do what is necessary for their current financial security, I would say yes and that’s why we provide a little help from time to time. 

Do Connie and I deny ourselves or sacrifice any part of our retirement for our children? No. 

Hypothetically if I were to give advice, it would surely include what I often state here regarding Social Security, income replacement, spreadsheets and budgeting, debt, income streams and annuities and survivor benefits. 

But I’m not sticking my neck out today.  

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George Counihan
21 days ago

I had seen too many cases where young folks had graduated from college and upon getting their first job proceeded to buy new cars/move into expensive apts/travel/upgrade the lifestyle etc and not do the right things financially. So I cut a deal with my 2 kids. I would pay for their educations (it was a struggle) provided they agreed to the following … For the first 3 years after they got their “real jobs” they had to show me the statements indicating they had signed up for their company 401K and were fully funding it. And I strongly suggested they live at home for a year and continue to drive their “college cars”. They both did so and were able to save nice large down payments on their first homes.My son to this day updates me on his retirement savings and has thanked me many times for getting him started saving early and preaches the “time value of money”

Harold Tynes
21 days ago

When my kids were middle school and high school age, they had brokerage accounts (joint with me) to invest in stocks and money market funds. They also had summer jobs and invested their money. They learned about the stock market and the mechanics of buying and selling. Once they got to college, I showed them how their 529 plans worked to pay their bills. Summer jobs put more money in their brokerage accounts. When they graduated, they signed up for their 401k’s and I guided them through their option’s. I gifted them Jonathan’s book and encouraged them to read it. When they got married, I made sure they got my name off the accounts and encouraged them to have joint accounts with their spouses. When the grandkids came along, my wife and I funded the grandkids 529’s with enough to pay for their college in a good state school. I will respond to questions my kids ask about investments. They ask a few questions, but not many. They have seen our will but don’t have a view of our financials. That will come in the next year or two. Will we share more cash with them? My wife and I will have to see what these next few years bring. We are just starting our retirement so things are still fluid.

Scott Dichter
22 days ago

My thinking is that there’s no way to know if children understand anything about personal finance if there’s no conversation.

We also worry if the conversation starts that they’ll ask questions we don’t want to answer.

My journey, a first step is requiring my child to complete an online personal finance course which we’ll discuss as it’s completed. We’ll see where it goes from there.

OldITGuy
22 days ago

It seems like there’s 2 general themes reoccurring in the comments below. One theme is to talk to your kids about financial stuff and the other says to refrain from offering unsolicited information. I think there can be merit to both approaches, especially depending on the kid. I’m reminded of an old Pete Rose interview where he was asked what’s different now that he was in a dual manager/player role. He answered that as a manager, if there’s 3 guys in the dugout, he needs to know which one to pat on the back, which one to kick in the butt, and which one to leave alone. I suspect the same may be true when considering advice to anyone, including our kids. Just my 2 cents.

Michael1
22 days ago
Reply to  OldITGuy

That’s a good point, and I think it’s largely because the original suggestion was specific about giving advice to one’s children, so we’re seeing lots of thoughts on whether to do it or not, not the actual advice. If on the other hand we’re talking about say a recent high school graduate who actually asks, we’d probably see very different comments.

mcgorski
22 days ago

Richard, great post.

A running theme that we’ve seen on Humble Dollar is a lack of personal finance education and retirement education in the USA. This has come up repeatedly in different ways through many articles. I think we can agree this is a real issue.

Given that, and given your experience and back ground with retirement planning, why wouldn’t you at least outline some different approaches for your children – the various pitfalls they should avoid and then let them choose one for themselves?

As a father, I kind of feel duty bound to at least say to my 20 year old that ‘this is what’s coming your way’ regarding retirement and you need to start this now. If he doesn’t take my advice, that’s fine, but at least he’s been told.

bbbobbins
21 days ago
Reply to  mcgorski

I wish my parents had known enough themselves when I was starting out at 22 to drop a financial planning 101 on me.

I didn’t do terribly but I could have done better out of the savings I managed to put aside even from early working life. And I’d have done better from real estate if I’d been prepared to push it on mortgage debt.

stelea99
22 days ago

Good job on this post! Like everything you write, you are always sincere.

Just my opinion, but we tend to treat our children as our parents treated us. In turn, we hope our children will treat their children as we treated them. If we have been open, helpful and loving, then our kids know they can discuss anything with us. But, one of the keys to good relationships with adult children is not giving unsolicited advice. The example you set is much more important than what you say.

William Dorner
20 days ago
Reply to  stelea99

Amen. The EXAMPLE you set means Everything.

Edmund Marsh
22 days ago

Dick, this is a good, honest post. I grew up in a family where money was not discussed until my father developed dementia in his late 70s. At that time, I broached the subject with my mother, and offered help in looking at their end of life game plan. She was ready to discuss it, and readily agreed to some actions to secure her own future after my father and his pension passed away. I wish we’d had the conversation earlier. They both had good pensions, plus Social Security, with great saving habits, but no knowledge of investing.

With my one child, it’s too early to know how our adult conversations will go. Up to now, she’s been all ears when we talk about finances. But, she has an interest in the topic, and we’ve been very open in our family discussions, and have shared all of our information with her. The last piece was the balance in the 529 account. We didn’t want to kill her incentive to pursue scholarships.

Currently, she’s a freshman in college. If she’s single when she lands her first job, I expect our open conversation will continue. But as you indicate, a future spouse will likely change the dynamics

Jeff Bond
22 days ago

Interesting. I’ve told my kids (in their mid-30’s) that I’ve made some decisions, and they will receive much of my estate. I’ve also told them it won’t be life changing. They won’t be able to quit their jobs – – – but it may make life easier for them. A big part of it depends how how long I continue to wake up in the morning. 🙂

David Lancaster
22 days ago
Reply to  Jeff Bond

As Warren Buffet has been quoted,”The perfect inheritance is enough money so that [children] feel they can do anything, but not so much that they could do nothing”. 

Jack Hannam
22 days ago

One of your better posts! My sons are 40 and 44, both married, and six kids between them. Good point about not meddling in our children’s relationship with their spouses. I think important points are that you taught your kids by example, and trust them to have the maturity and responsibility to make good decisions. I generally don’t offer them or other family members unsolicited financial advice, but when asked, I tell them not what they should do or not do, but rather explain my thought processes behind what ever path I may have chosen. Then they can consider what I said, along with whatever other advice they have received.

William Dorner
20 days ago
Reply to  Jack Hannam

That is my approach too, give them knowledge to help make their decision, guide them, but We do not tell them what to do. They have to make their own decisions.

luvtoride44afe9eb1e
22 days ago

Very timely post.

My oldest daughter, age 40, sent me this post today from Instagram.

“Baby Boomers are the wealthiest generation that has ever lived”
wealth A recent Allianz report affirms baby boomers as the wealthiest generation to date, benefiting from a unique mix of affordable housing, robust economic growth, and strong equity markets.
Millennials, however, are contending with a starkly different financial landscape, impacted by multiple economic crises and inflation, which have significantly diminished their overall savings returns.
Although Gen Z shows promise of exceeding millennials’ wealth through shifting economic opportunities, Allianz cautions that no generation will likely replicate the financial gains of the boomers.

I’m not sure what prompted her sending me this and I’m haven’t discussed it with her yet, but I’m sure it is true. I do “worry” about how our Millenial daughters and their families will manage to retire as “comfortably” as we have but we do help them out paying for various expenses I.e. summer camp, for our grandkids, taking them on vacations. They and their spouses work hard and don’t live extravagantly, but it still is tough to save and plan for long term goals. I guess the one point that this IG post doesn’t mention is that Millenials do stand to inherit significant wealth from their Baby Boomer parents. As Jonathan stated in his interview with Morningstar, we choose to help out with gifts and sharing some wealth with our kids and grandkids NOW to experience the joy that it brings. Other than doing those things, we don’t discuss finances much with them.

mytimetotravel
23 days ago

You say you aren’t denying yourself, but you just said you denied yourself a country club membership. The thing is, if you deny yourself for your kids, and they deny themselves for their kids, and their kids do the same, when does it stop?

And why wait until after the election? The information will be of little interest then.

Linda Grady
22 days ago
Reply to  mytimetotravel

I think I read somewhere about the experience of those who caddy for DJT. Don’t remember where, but I do remember what. Let’s just say that some people always have to win. 😉

Linda Grady
22 days ago
Reply to  R Quinn

😂

bbbobbins
22 days ago
Reply to  mytimetotravel

I’m prepared to bet that someone who isn’t R Quinn cheats at golf;)

OldITGuy
23 days ago

Good topic. I’ve got 3 kids, 47, 44, and 40. The 40 year old is pretty irresponsible with money matters and does his own thing. He makes a good income but it’s painful to see him blow his money. He’s really not interested in discussing it. The 47 year old and I chat about retirement and money matters only occasionally, but she always listens and then takes action. She’s doing very well financially, including preparing for retirement. The 44 year old has recently become a bit more interested in the topic and so we’ve been chatting about it lately. He’s also been educating himself on the topic and definitely takes action. He’s probably making the least income of the 3, but I think he’s the one who will probably be best prepared for retirement. He’s certainly the one most knowledgeable about the topic. I’m lucky to have 2 kids that listen about financial stuff. I find it very satisfying to help them along on their way. I try to walk a balance between letting them live their lives, but also trying to make sure they’re aware of the most important financial concepts so they don’t fail due to ignorance. The topics I bring up I try to time appropriately. For example, early in their careers I focused on professional development. These days, it’s more focused on retirement planning. My approach seems to be working for 2 of them.

Ben Rodriguez
23 days ago

Fascinating and surprising. Do they read your content?

Ben Rodriguez
23 days ago
Reply to  R Quinn

Well…that’s less surprising. My wife doesn’t either.

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