On the Money is a monthly advice column. If you’re looking for advice on spending, saving or investing — or any complicated emotions that may come up when you’re getting ready to make a big financial decision — you canSubmit your question in this form. Here, we answer a question asked by a Vox reader, edited and condensed.
This falls into the category of “complex emotions that may come up when you’re ready to make big financial decisions”: I’m 65 and thinking about retirement. I am working with an investment advisor. We’ve tentatively set the end of 2025 as my retirement date, and I see on paper that it will work, but my two kids (in their mid-20s) will still need a lot of help financially — more help than I can give them. Once I am no longer working.
Knowing my own emotional tendencies, I’d feel guilty and selfish for making my retirement a higher priority than continuing to help them the way I’m doing now, but I also think that the longer I work before 2025, the more resentful I’ll feel. will do Can private finance even provide an answer to this dilemma, assuming we all survive anyway?
Dear Retirement Thoughts,
It’s good that you wrote me when you did because we’ve just turned the page on a new year — which means you can make a New Year’s resolution to solve this problem in a way that doesn’t make you feel guilty and resentful.
Start by talking to your investment advisor. When this person tells you that you can retire at the end of 2025, what exactly do they mean? You told me that you can provide financial support to your children while you are working, but you do not expect to be able to provide support after retirement. Does this mean you start your retirement on a shoestring budget with very little wiggle room? This can be a problem in the long run, and not just for your kids.
Look carefully at how much income you can expect to earn as a retiree and then ask yourself what you hope to do in your retirement. A life where you don’t have extra money to help your children can also be a life where you don’t have extra money to take a vacation or move into a new home or cover a significant unexpected expense.
On that note, you should think carefully about the type of expenses you can reasonably expect over the next few decades. For example, your children may get married. You may have grandchildren that you want to see regularly. Even if you’re not the parent who decides to help with your children’s educational expenses or down payments — and you don’t have to be — it’s reasonable to expect that you’ll put at least some money aside for your continuing relationship. Although you have not mentioned any responsibilities to the generation above you, it is also reasonable for a retired person to expect to provide both money and time for the care of parents or in-laws.
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With this in mind, take some time to talk with your children about their expectations and goals, both in terms of their own financial stability as well as any help they can expect. If you have provided your children with substantial financial support in the past and/or bailed them out of various financial jams, they have a right to know that this support may change in the future. You can feel better about your retirement decision if you know your children have a plan that includes skill-building, career-building, and basic financial management. Can they make a budget and stick to it? Can they save for the future? Do they have goals that they are working towards?
If your kids don’t take money seriously right away, don’t worry — and don’t feel guilty. You all have a year to resolve this issue, which may include an honest conversation about what each of you can afford and what expenses you need to prepare for. A 20-something might be prepared to move to a new city for a higher-paying job, for example — and a 60-something might be prepared to cover airfare for a vacation.
The more you talk about what each of you wants and needs, the better you can prepare for your own retirement. I don’t recommend continuing to work solely for the benefit of your grown children, since you already have mixed feelings about the idea — and the last thing I want is for you to feel miserable in 2025 about the way you’re earning and spending your money. . But you have a year to decide if you can retire from your current savings and investments and if your children have enough knowledge and preparation to handle the next phase of their lives without your immediate financial help. These conversations can give you a clearer picture of what the future might look like. Since everyone will “survive either way”, as you say, there is opportunity to make positive, productive choices without the stress associated with scarcity. Use this privilege wisely.
So this is your assignment for 2025 – or, if you prefer, your New Year’s resolution. Address these issues while you’re still working so you know when you can retire guilt-free.
