The ability to help my kids absolutely did not factor into our decisions to retire. We got them through undergrad at top-notch schools with no loans. We figured that was a great beginning and more than our parents did for us.
Having said that, our retirement plan does include leaving significant (for us) money to the kids. So when we look at a Monte Carlo analysis, our chance of success is not based on having a dollar when we die at 100; it’s based on having significant resources when we die to leave the kids. Now, we may start handing out the money early and already have. Like @deb922, when my mom died and left us some money, we passed on some of that to our kids. And I imagine that we’ll give more as the years go on and we turn on all the income streams and figure out what our real needs/wants are.
Our FA adviser wants us to spend more and thinks the numbers in our MC analysis are crazy. Oh, well. We do think about how fun it would be to leave a bundle to the kids!
DH was 63 when he was diagnosed. We had been discussing retirement, which he could not fathom before 68. His siblings were starting to retire and I think that could have spurred him to join them, were it not for his cancer diagnosis. He died ~11 months after diagnosis.
Before he was sick, we gifted about $20k to each toward the purchase of their first house. (The topic came up quickly when each was in home purchase negotiations.) D2 had a good amount of money left in her UTMA account. D1 had been out of college abut 8 years when she bought her house.
After his death, i decided to retire once I knew how much I would have monthly. We had kept a life insurance policy in force and that helped me to help the kids.
I always discussed helping them. It was not something DH wanted to focus on. I thought that we would subsidize childcare. (The other MIL is doing it now). I plan to pay for the private Catholic education that D2 and SIL plan for their children.
So, we didn’t work longer or save harder to be able to help the kids in the future. It was just about what budget space we would have some day and what our priorities would be.
I think that being kid safety net was a back-of-the-mind factor, though not part of the model. Then before retiring we unexpectedly inherited some money (as did they), and that buffer made me feel better.
Perhaps a way to approach this is to say that adult children who encounter a rough patch are welcome to move back home (contributing in a minor way to expenses and workload)… but their retired parents are not in a position to carry their rent / expenses.
Are you perhaps more worried about your income streams when you retire? And also that moving from being a saver to a spender (IOW, spending those retirement savings)? Sometimes this is what worries soon to be retirees more than they realize.
I really appreciate all the insightful thoughts and shared perspectives.
Our main focus re: kids in our retirement planning has been to allocate enough for end-of-life care so we aren’t a financial or logistical burden on kids in our elder years. With the idea if we die sooner kids will have more of an inheritance.
We paid for younger kid’s college (older kid did not go - but was given money for wedding and for new house).
So I think (helped by funds from my parents’ estate) we have reasonably contributed to the costs of setting them up to pursue their paths in life. My parents did the same for me.
I’m just wondering about the feeling of constraint should an emergency arise (mainly with younger kid) and I cannot help financially in the same way as when I was working full-time.
I guess one additional good thing is that any future house we buy will have 2-3 bedrooms (ideally an ADU!) so that if a kid needed to live with us for a while, they comfortably could.
A few folks above mentioned the ability to provide support (visits, grandchild babysitting, etc.) in ways that aren’t strictly monetary.
That makes me feel good - that sort of support can continue.
Dh and I have been discussing this as it looks like he will be forced into retirement within the year (employer restructuring). We designated a non-retirement mutual fund as our children’s life events fund. Their 529 accounts should cover college costs, but if not, we can pull from the mutual fund. We also plan to pull from it to help buy a first car, deposits on a first apartment, and wedding gift or other needs. We do not expect to be able to pay all of our children’s needs, but do want to give a bit more of a leg-up than we got.
It took me a long time to get comfortable with “we have enough and shouldn’t outlive our $”. We have been very generous with gifting to our kids and their spouses, as we would rather see them enjoy it now than when we are gone. We also have continued to have some family vacations which we pay for. The concern for me is that our kids (who fortunately currently live relatively near each other) live in a very high COL state, and we have just, after lots of looking, put down a large deposit towards an eventual CCRC/senior living place out there. The waitlist is like 5 years give or take which is why we did it now, but it is very expensive, and the costs to both “buy in” and to pay the monthly fees is a lot! So we may stop being quite so generous with what we give the kids. I know what it was like having to care for my parents long distance, and am now watching what my younger s’s MIL has to do with her aging parents who, even with caregivers in another state, is challenged with.
To add to that, I have sons, and am being realistic that we don’t want to be a strain on our kids. IMO, it’s different having sons vs daughters in terms of caring for parents.
My understanding is there’s no tax consequence to the recipient for excess gifts if the right form (709?) is filed, and the only consequence to the giver is a reduction in their lifetime estate exemption, which is currently $15m each (and not something I’ll ever have to worry about exceeding lol).
Correct on the gifting exemption and $15m is not something I’ll ever need to worry about. The bulk of my funds are tied up in a beneficiary IRA. I do not want to pull funds from there as I’m concerned about being in an even higher tax bracket and Medicare costs. H received funds from his family during their lifetimes so it is all highly appreciated stock with no stepped up basis. Right now if I pulled downpayment funds from the beneficiary IRA account I would pay income tax on this. If we pull from H’s stock account, capital gains are huge. Either option isn’t palatable.
I am hoping to sell our home in the next year or so and move somewhere less expensive. Hopefully that would provide funds to gift. It is frustrating to have what is to me a lot of money yet feeling I can’t really access and use it as I would like. I’m in no danger of running out of money and I’m in a higher tax bracket than when I was working. First world problems.
Sorry about your downgraded insurance company which holds your LTC insurance policies. Thankfully it is still a viable company.
We both purchased LTC insurance with CNA (who a few years after CNA changed to insuring physicians with new policies) - they were big in LTC insurance, in 35 states and were ‘the gold standard’ for LTC insurance. We had 5% inflation, unlimited years of benefits - but once 10 years of no rate increases, we pared down our policies to keep at our annual premium (about $1,000/year for each of us) - our benefits have limited years but still very good payout if needed. They dangle incentives to buy out our policies with returning all our $ we have paid - no, we are happy hanging onto our policies. We both turn 70 this year. One hopes to never need to use the policy, but for me, it gives reassurance on having some options/flexibility if one of us needs care. I haven’t investigated their insurance company rating but believe it is still very solid. If not, it would be worth cashing out the policy.
My older sister (age 72) has a smaller LTC policy for herself; she is very healthy and taking care of her soon to be 89 YO husband. He is able to remain at home because he can still ambulate, and she helps him with his personal care, she does all the household tasks. She hires some help for the yard. Sometimes he has been having a good enough day to go to church (like for Easter), but someone helped him put on his jacket and somehow hurt his arm (somehow, he hurt this same arm when he was brushing his teeth, bumping the arm). I told my sister that she has to verbally tell people that he is medically fragile. There is a retired Methodist minister living down the street from them that is a big guy and was helpful getting BIL into a vehicle for a medical appointment - and also was good for a visit (BIL is a retired Lutheran minister). On a sunny day, sometimes BIL can sit outside a bit. They get large-print library books – when I visited a few years ago, he had read over 500 library books since they have lived there (in his retirement). He follows the news (he was a mid-sized city TV news reporter and got his journalism degree from Marquette University) before he went to seminary. My sister is active, playing pickleball, bike riding to the gym for group classes, etc. I don’t think my sister gave a lot of thought to this current scenario when she married her husband, she was 25 and he was 41. BIL still has a full head of hair, and mostly dark hair, so he doesn’t look his age, but his movements give away his age. BIL always was a bit of a hypochondriac and they have for years overtalked about the slightest cold for example. Their sons are 40 and 44, and both their families live within 2 hours’ drive. My sister can afford to bring in some personal care if needed; their small-town Edward Jones’ FA scared her quite a bit when he warned about skilled care/nursing home care would drain them pretty fast (within about 3 years). They both have pensions, but have been IMHO overly conservative in their investments, and IMHO could have done better through Fidelity, Schwab - except their over-conservatism probably would have hurt them there too - but I suspect their fees with Edward Jones are higher for what they are getting. BIL had enough of a health scare recently (heart issues with declining heart, which is after having had triple bypass surgery years ago, but they recently got him on a 2nd diuretic that has helped with heart/chest pain) - and very limited walking now, maybe a few steps in the driveway. DH will be one of his pall bearers; at least one of the pall bearers has already pre-deceased BIL. Their attorney son has made sure all his dad’s legal things are in order. They take it one day at a time and look forward to the various family gatherings. They lump various birthdays into groups, and the next one is in July with BIL’s birthday and a few others together (around July 4th, BIL’s BD is July3rd).
DD1 is married and DD2 is single but with long-time BF. We have done interest free loans to DD2/BF - this has been for vehicles. We helped DD2 with furnishing her apartment after college graduation (she still had some money in her stock account, which we wanted her to have as emergency fund) - she had a vehicle from us. DD1 (2 years older than DD2) got married in 2017, and we spend the same on both of them - so DD2’s vehicle was equivalent of DD1’s wedding costs paid from us. DD1/SIL now has 5 children, so each time we put money into new grandchild’s college fund, DD2 gets same amount. DD2’s vehicle ‘died’ in 2024 and used most of her emergency fund and she has paid down some on the amount we loaned her to get a good used newer Toyota Rav4 vehicle (her car had 200,000 miles on it and had been serviced for the 200k miles, with over 145,000 put on by her - a Toyota Highlander, and would still be running, but the oil pump/oil line leak and engine damage required the vehicle to be replaced - she had it towed as soon as the engine light went on, but engine damage was done). DD2 had some savings, but not enough - and we didn’t want her to pay a high interest rate with car payments. She got the car loan, and a month later we helped her pay it off. DD2’s BF had a great job and had a non-working vehicle (to be sold for parts) - unfortunately the higher paid job ended (he was living with us, so barely no expenses and paying off his bills from prior under/unemployment) just a few months after the car purchase in early 2024. We trust him with our daughter, so we trust him with the vehicle loan (DH is also on the title) - only concern is if the car gets wrecked because insurance will not pay the balance of what is owed to us.
These are relatively small amounts. We know that when my parents had the ability to help us (and some of my siblings) they did gift us some cash one year - $10,000, in the early 1990’s. This was small relative to their estate; dad died in 1995 and mom died in 2010. Mom’s care did not spend down the estate (she had live-in housekeeper/cook and one brother lived a house away). We all received cash out and estate closed once the last piece of property was sold (mom’s home).
I consider us a ‘safety net’. for DDs. We are in good health and our estate should outlast DH and me. Initially DD1/SIL lived only 100 miles from us but then moved many states away mid-2023 with SIL’s Army career when their 4th child was 3 weeks old. We help with DD1/SIL with the now 5 grandkids over the Christmas/New Year’s holiday time the last 3 years when DD2/SIL could not take all the days off to cover the older kids’ school holiday time. I helped when DD2 was expecting her 5th baby in 2025 (and still working FT and continuing to work FT) - helped with laundry, kitchen cleanup, childcare over 6 weeks and then came back for a month when she returned to FT work going to workplace versus PT remote work (and they didn’t have a spot in daycare for the baby until later that month - I was coming to help, and then I was a Godsend).
DD1 has always been excellent with budgeting, and has had excellent income. DD2 is good on budgeting, but her BF’s periods of under and unemployment has hurt their household income - she also does like to travel and could do a little better with greater saving. Being in several weddings and required bachelorette trips have been a drain. DD2 also is completing her last test to be a PE with her civil/architectural engineering work which will mean more income. Both DDs are fortunate to have Roth 401k, Roth IRA, DD1 with government pension. SIL has some military benefits.
We have the same issue-- we have Genworth LTC. But since my DH is a believer in self-insuring, we did decide, a few years ago when Genworth got sued, to take one of their adjustment options (because our premiums DID go up every year) and we selected an option to take the low COL inflation adjustment and lower premium increases and get several thousand $$$ back. I’ve been reading about genworth’s status, and hopefully it will stabilize and not go belly up. The articles I read said they are considering getting back into selling LTC products under the name “Care scout”. We should be getting our annual premium bill next month, and if what the website is showing is showing the upcoming premium, it actually is the same as last year. We shall see… But we have had the policy for 15 years. Can’t see cancelling it since I don’t believe it has any cash value or death benefit (it isn’t one of those hybrid policies).
Same here, none. We were very clear with our son that his education would be our last financial gift. Given the 40-year age difference between us and him, our retirement planning focused heavily on ensuring he would never need to worry about us financially. However, it looks like he will far outearn us, so maybe HE should have been part of our retirement plan.
My husband would like everyone to know that his parents set him up well. They paid for his college education. They paid for his siblings college education and med school.
My parents weren’t in a position to do even that.
I’m not discounting what our parents did for us. They did what they could.
Our parents were/will be able to support themselves and that’s what we’ve focused on. Not being in a position to think otherwise.
Thinking of helping them in the future wasn’t a significant concern, but seeing that they were self supporting was. What I mean by that is if they didn’t appear to be fairly well launched I probably wouldn’t have retired when I did.
Another factor was my mom. If she hadn’t died before I retired, I probably wouldn’t have retired when I did, because I likely would have had to support her.
One more thing we worried about - NOT being a financial drain on our kids. We believe we’ve saved enough to not cost them anything at our end of life. Hopefully we will have a lot left over for them, but our primary thought was to not cost them anything. If we die with a dollar, but they didn’t have to worry about our care, I call that success.
Our number one goal also is to not be a financial burdem on our kids. I admit that that’s part of the thinking behind the inheritance we hope to leave them — if we’ve really miscalculated, then we’ll use that money for our care and still not be a burden.
We are definitely keen on never becoming a burden to our kids. We have Genworth LTC polices bought through an employee program. Decided to not get inflation protection in order to keep rates down, knowing it would be helpful supplement not full coverage. (We’ve had the policies since our 50s, pay about $220/month total for both of us. Coverage is $200/day for nursing home, $100/day in-home care. Max about $230k each). Now that we are past the youngest, most worrisome year, we’ve talked about dropping it if the rates escalate and becoming completely self insured. But so far (ages 71 & almost 64), our rates have not changed
Our coverage would help defray the cost of care, but we would still have to pay OOP as well. We have a combined coverage plan that would “cover” (pay out) based on the max per month, of about 6 years. E.g. If one uses 4 years, the other gets two.
I think your plan is better coverage than what we have and perhaps that was affected by our accepting one of their offers to adjust our plan. I actually thought our coverage was better per month than it is, but at least it would help defray the cost. I don’t think our maximum lifetime is as good as yours either but commonly by the time a person qualifies to use their plan and gets past the 90 day wait period, I will not likely to live long enough to benefit from these plans for long periods of time. At least I believe that’s what historically has been true.
We do think about how fun it would be to leave a bundle to the kids!