You Loaned Money to Your Kids
It’s normal to want to help your children but substantial financial help could affect your retirement savings. “I know that it’s very difficult to say no to our kids,” Frankle said. “But if you are going to help them out, you have to do so judiciously.”
You have to continue being a responsible adult and avoid emptying your nest egg sooner than expected. “I have a number of clients who were forced back to work because they didn’t put a limit on the support they provided to their kids,” Frankle said.
What To Do
Sticking to a solid financial plan will help you avoid or lower the risks of draining your retirement savings to help your children. “Your retirement security depends on the balance you create between your retirement income, assets and spending,” Frankle said. “If you spend down your assets by making loans to the kids, you might not have sufficient assets to create the income you need to stay retired.”
You’ll understand this if you have a plan, he said. Not having one will only make it harder for you to set certain limits when it comes to your kids’ requests for money.
