How to Prepare Your Children for Your Retirement
This is a touchy subject to approach. We’re talking about money, and so many families are very secretive when it comes to money. Families fight about it. Siblings get into battles about this. But, you do need to talk to your grown children. They need to know where everything is in case something happens. At least make a list of all of those accounts and the balances. You may pass on to them the actual list, or you may just tell them where they can find it. Keep it in a safe place. That means it needs to be in a lockbox or in a firesafe box, safe deposit box. Or, you can keep it online as long as it’s stored in the cloud (and securely stored online). Let your grown children know where to go and look to find that information. Update that list once a year. Just go back, and look over it for your own benefit and for their benefit as well.
Make a list of professionals. Maybe even just get professionals’ cards (on attorneys, financial advisors, CPAs), and pass that on to your grown children. Again, they’re going to have a contact, someone to call in case something comes up. And they need to be able to find those wills and Powers of Attorney. Where are you going to put those papers? Again, in a very safe place. And you need to think very carefully about who will be the executor of the will. Who’s going to serve as Power of Attorney? Talk to that one child. Make sure that they’re willing to take that on, because it’s a tough job. They’re going to have to deal with other siblings and all of those issues that pop up.
Let your family know what’s in your will. Don’t surprise them with anything. That can be an awful situation.
It’s more important to have that Power of Attorney, because you’re more likely to become disabled, not able to take care of all of your bills. So, to have someone who can come in and sign for you is wonderful.
Then you need to go on and start to talk to those grown children about what your provisions are for retirement and old age. You can gradually let them know about any pensions, tell them what your Social Security is, talk to them if you have long-term care insurance and what that policy will cover; because they need to understand what their obligations will be and where they can go for resources. They also need to know that they can find something; because by the time you need all of those things like long-term care, you may not be in your right mind and able to make those decisions on your own.
Then, I always talk to older people about this idea of inheritance or assisting your grown children. It’s the easiest thing for us to do as parents: to help our children. We still want to give to them. We sacrifice. But, I always say: Take care of yourself first! That’s the greatest gift you can give your grown children. If you make sure you can provide for yourself in retirement and old age, then they don’t have to. And, if you want to help them, that’s fine. Make sure you can do it, but don’t enable them, and set some expectations about what you’ll pay for and what you won’t pay for. It could be something as simple as college for their children. You can set those expectations as far as you’re setting up a college fund for any grandchildren. Or assisting with the purchase of a home. Things like that. You wouldn’t put that in your will, but you would just talk to all family members about that.
Be open with your family members. Tell them what will happen. The toughest thing that I hear from parents is how to be fair. You have children with different abilities, with different resources; and it’s important to most parents to make sure that whatever they do for one, they do for all of those children.