<p>I’m with intparent post #54. In fact, I’d go so far as to say that it’s a little insulting to the presumed abilities of my kids to assume that they cannot make their own financial decisions in young adulthood.</p>
<p>My own parents have always been far wealthier than I but expected me and my siblings to make it on our own. My parents respectfully declined to loan us money for a house and while generous at the holidays, have never gifted large sums of money at any point in our lives. They did pay fully for our college tuitions. Their expectation of us was that we would make informed career choices, informed spouse choices and figure out a way to be financially independent. And we all did. In fact when they die (with a current net worth in the millions), it would not surprise me if their estate passes through to grandchildren and the ASPCA (and other charities). It’s their money, I didn’t earn it, and am happy to have made it in my own way.</p>
<p>archiemom: Assuming kids are well behaved, some of us are discussing tax planning strategies; not parenting.
I am hoping that some parents start to think of funding Roth’s as a result of this discussion</p>
<p>For us, funding the kids’ Roth IRAs is part of the estate plan we’ve set up with our adviser. The adviser explained the tax advantages to them when the accounts were set up (they were in high school). They still need to “fish” – they aren’t interested in living on just 5k / year. They fund their 401(k)s. It’s just taking advantage of a great tax-saving opportunity with funds that will be theirs eventually. None of us, parents or kids, interpret it as a statement on their ability to handle their own finances.</p>
<p>My parents did the same with my siblings and I, BTW. I always considered it one of their retirement accounts, kept it separate from my own savings, and it will probably pass to my kids untouched.</p>
<p>ETA: Exactly what father91 said in post #62.</p>
<p>“Assuming kids are well behaved, some of us are discussing tax planning strategies; not parenting.”</p>
<p>Exactly. I think my kids are now old enough that I learn more from them, than they do from me. Every now and then I have something useful for them. They don’t need any more lessons that everyone must be responsible for their own future, and depend upon only themselves to make it happen. They’ve been listening to that for their entire lives.</p>
<p>This is purely tax planning. Your son is so far ahead of the game, father91. Contributing to a Roth as soon as possible (whether you or him), doing an IRA when he makes too much, converting to a backdoor Roth when his income is low as a grad student. Very smart. I don’t think he needs any lessons in responsibility.</p>
<p>archiemom, If my parents were millionaires who I though were going to pass their wealth onto various charities and my child, do you think I’d be worrying about this issue? </p>
<p>You are in a completely different place and it would be nice if you were at least somewhat aware of that before you decide that I’m “insulting” my child.</p>
I don’t think people are talking about giving large gifts to 50 year olds. I think what they’re saying is that the kids will get the parents’ estates when they are in their 50’s or so. The question then becomes not “would I give it to my 50 year old child” but is “do I leave my money to my children when they can use it, or when I die?”</p>
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That’s great in the abstract. But not so much necessarily in the real world. If I had refused to pay for my d’s health insurance, she would have been unable to take the entry-level job in her industry that is now positioning her pretty well. She chose an industry that will pay well once she has some experience, but is very difficult to break into. And she chose one that is centered in a very expensive area in which to live.</p>
<p>So should I have told her, “Sorry. Go do something else somewhere else”? I don’t think so. It’s very different than when we graduated; it’s much harder to get that first feeder job. She’s doing everything right - she is almost self-supporting. I’ll give her a few more years. My contribution is still less than if she had gone to grad school.</p>
<p>Agreed. We’re fortunate enough that we can help our kids financially without jeopardizing our own retirement. We figure that we’d prefer to help them now, and maybe it’s a bit selfish, because we get to see them be able to do things they might not otherwise be in a position to do at the moment. We get to see them be able to enjoy it while we’re still here. That isn’t to say that they’ll get nothing when we die, they’ll get the bulk of it, but I’m not seeing what the problem is with helping your kids if you’re in a position to do so. We have five Ds and all are working in their desired professions with the exception of our youngest who is still in med school. Trust me, they all know how “to fish” so that argument is kind of silly. My H and I struggled financially for enough years to know that there’s nothing noble about it, and we both promised ourselves that if we were ever in a position to prevent our own kids from going through that type of struggle, we’d do everything in our power to do so.</p>
<p>Totally agree. There is a different answer for everyone.</p>
<p>For example, everyone says ROTH is such a great idea. It always make me feel like I am missing out. I revisited it every few years but it never is right for us.</p>
<p>PMK, I so admire and respect your choice to help PMKjr to have the financial freedom to follow his dreams without this particular worry hanging over him. Only God knows what the economic terrain will be for our kids as they progres through adulthood and I think it is wonderful that you choose to take some of the uncertainty out of things for your son.</p>
<p>Maybe it will pay well… maybe it won’t. And now she will always live in a very expensive area. This is EXACTLY the kind of choice my dad’s treatment of us in our 20s pushed us away from, and I am grateful for it. My D1 knew she was going to be on her own financially when she graduated, and she hustled VERY hard because she knew this. Graduated Phi Beta Kappa thought a LOT of elbow grease; worked hard on her interviewing, resume, and networking skills; did as much internship work as she could fit into her schedule (including an unpaid internship during college her senior year while working on her honors thesis); was also amazingly focused and organized in her job search. I am convinced that while she is a very good kid, the worry about supporting herself drove her to work harder so she was well positioned to get a good job even in a tough job market.</p>
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<p>“Well behaved” has nothing to do with it. Every human being in the world responds to the incentives they are given. If they are not incented to think on their own about choices that make them financially independent and give them a solid foundation of savings, then they won’t. I am not saying anyone here does not have great kids who are responsible and motivated. But there is something different about being completely on your own financially that forces you to grow up and make life choices that get you on a sustainable and solid path for the next 50 years.</p>
<p>intparent, it sounds like that’s exactly what you’re saying. Insinuating that Chedva’s D or any of mine, or anyone else’s here who didn’t make the same choice you’ve made, didn’t work as hard as yours, weren’t as motivated or successful as yours, or that they aren’t on a “sustainable and solid path” for the future, is just plain wrong, not to mention insulting, and kind of rude. What is so difficult about being satisfied with your decision not to help your D financially, without having to denigrate those who make a different choice? You also are making a lot of assumptions here about the children of those of us who have chosen to contribute financially to their lives.</p>
<p>I like the idea someone had upthread of matching the kid’s contributions for a period of time, or up to a certain amount. Seems to me that would encourage the habit of regular saving (which is our primary goal), while boosting the value of those crucial early contributions.</p>
<p>For some, setting up Roth IRAs as early as possible for their children and funding them as much as possible is a matter of tax and estate planning (but I wouldn’t do it if my children were not responsible).</p>
<p>I agree with those who think my role as a parent to to guide, but not to take over their lives. I have encouraged my kids to fund their Roth IRAs and they all have. I would consider matching, maybe, but never doing it for them. They will inherit enough from us. My goal is not to make them rich, but to teach them to prepare for the future. When my son was young, he had a friend whose parents gave him an allowance every week. Of that money, 1/3 went to giving to charity, 1/3 to savings, and 1/3 went to spending money. In reality, THE PARENTS give to charity and to saving and the child spent what he received. To this day, I doubt that kid ever gave a cent of his own to charity or saved a cent. He never learned how.</p>
<p>"^^^If he is your son’s age, he can still learn, perhaps not from his parents, but from his peers. We don’t learn everything from our parents."</p>
<p>That’s for sure. It took me awhile to learn that sometimes my parents really had no clue of what they were doing, and that they were absolutely, completely wrong. You have this idea that your parents must know everything, but actually they are just muddling around like the rest of us. Our kids started calling us on our hypocrisies and errors pretty young in life. I always hope that I haven’t given them more good advice than bad.</p>
<p>Of course, I like to take credit for anything good that my children have done, because it must be due to my superior parenting skills, right?</p>