My last two posts focused on the financial assistance parents are often asked to provide for their adult children. This weekend Michelle Singletary looked at the flip side of this issue suggesting that adult children should provide financial assistance to their parents.
Singletary, a writer for the Washington Post, notes that she often receives emails “from retired seniors who are having to tap into their savings to help grown children who are in trouble. Grandparents are helping pay the expenses of grandchildren. And these are not children who parents have abandoned them… These are children being raised in a middle-class, two-parent, two-income households.”
She asks, “In their senior years, shouldn’t it be their adult children sending them money?” She suggests that the younger generation is so selfishly focused on their own needs and desires that they allow their parents to fund their skyrocketing desires without realizing that those handouts may be diminishing the wealth of their own parents.
Singletary was raised by her grandmother, and in college she sent home money to help pay her grandmother’s property taxes and groceries. As she ages, (if the need arises), she expects her children to do the same for her. In fact, she jokes that her three children are Plan B for retirement. Plan A is to fund her retirement account, save religiously, and pay off her mortgage before she retires. Plan B is to have her children take care of her needs. Of course, in order to do this, adult children must learn how to handle their finances. Singletary urges parents to teach their children how to handle money and to teach them early.
Providing financial assistance to parents is an interesting financial planning topic. Time and time again we hear financial advisors say you can obtain a loan for a car, a house, or college, but you cannot obtain a loan for retirement. Yet we constantly read stories like those Singletary mentions above. Stories in which retired parents are footing the bills of their adult children. If parents are continually shelling out financial assistance for their children, it’s not so difficult to envision a time when they will not be able to support their own basic needs.
With the savings rate in negative territory it’s clear that many individuals are not thinking about saving money for the future. Clearly, adult children who are asking for money, will not have the financial standing to support their aging parents. This is another example of the importance of teaching children about money. Rather than looking for handouts from their parents, perhaps children should be looking at ways to support the parents who so dutifully raised and cared for them.
If you want to check out this week’s Color of Money article, Pay Your Dues When Your Parents Age, click here.