Finding the right balance with family in retirement
We all like being generous with our time and money, especially when it comes to our children. More and more retirees are offering their resources to help out the next generation. So how do you get the balance right between helping others and looking after your own finances and well being?
While many retirees are making travel plans and following their interests, there are lots of retirees experiencing demands from family and loved ones on their time and finances. It’s not uncommon for retirees to take on significant caring roles. Especially when they have responsibilities for both grandchildren and elderly parents at the same time.
Many retirees are also giving children substantial financial support. A survey conducted by First Home Buyers Australia shows 21% of 316 respondents expect parents to help them buy their first home by acting as guarantors1. So it’s no wonder many retirees are drawing on their savings to help children achieve their goals. Many retirees decide to help their children financially, by preserving wealth for their inheritance, helping with money for holidays and grandchildren’s school fees as well as home buying.
However you may be helping your family or loved ones, it is important to make sure you also look after yourself. If you want to be there for your dependents for longer, it’s essential to put your own finances and well-being first. Here are our top tips for getting a healthy balance between serving your needs and theirs.
1. Have a plan
Taking time to really think through what retirement looks like for you can help you determine your priorities. Don’t let your sense of duty stop you from being completely honest about your goals and preferences. Once you’ve come up with a plan, be sure to share your intentions with family and loved ones. It’ll be easier for all of you if they know what to expect as your lifestyle changes in retirement.
2. Manage expectations
If you are planning to support your family in some way, clear boundaries and communication will help you take a balanced approach. If you’re caring for grandchildren, it could be too much for you to take them for five days when three works better with your other commitments. A trial period can be a good way to make sure your arrangement works for everyone.
Being clear about any financial support you’re giving is just as important. If it’s a one-off contribution, you’ll need to arrange terms for repayment, unless it’s a gift. For regular payments, agree on how long you’ll be providing these for, particularly if it could have an impact on your own income.
3. Understand your finances
You may be eager to give money to your family, but can you really afford it? If you’re left short, it can put pressure on you and the very people you’re trying to help. Before dipping in to your savings, it makes sense to understand your own financial position and help your children research other ways of getting extra income, including Centrelink payments they may be eligible for.
If saving more now for your retirement is important to you, there’s still time to make extra contributions with a salary sacrifice arrangement.
Need help managing your money?
Getting expert advice can make a big difference to how prepared you are for retirement - both emotionally and financially. By discussing your lifestyle goals with a StatePlus financial planner you’ll have a much better understanding of the super and income you’ll need to make retirement a positive change in your life.
For more tips and tools, download our free Retirement guide or call us on 1800 620 305
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1 How parents can help their children buy their first house, Domain, 5 May 2016