#1 Category: Personal and Family Risks—Unforeseen Needs of Family Members
Many retirees are in the situation of helping other family members such as children, siblings, grandchildren or even parents. Any change in the health, employment, or marital status of any of them could mean a greater financial support.
Some examples of financial assistance include paying healthcare costs for an elderly parent, paying higher-education fees for children, or providing short-term financial assistance to adult children in the event of unemployment, divorce, or other financial adversities.
“Bailing your adult kids out of their repeated financial mistakes can derail your retirement. For some people it’s like taking an unexpected cruise every year with all of the expense and none of the fun. It’s important to set boundaries on excessive gifts or emergency checks when you leave your steady paycheck behind. Or, if you think this may be an issue, tell your financial advisor about it, so you can work those expenses into your retirement income plan,” says Kristi Sullivan, CFP® of Sullivan Financial Planning, LLC in Denver.
You can’t predict your adult kid’s unemployment, but you can definitely put some money aside for a rainy day when you’re planning your savings for retirement. You never know what the future holds for you and your loved ones—that’s why you should always be prepared.
