Watch: 5 reasons to talk about estate planning

Posted by Shelly Eweka on posted on Oct. 20, 2017 12:00:00 PM
Although you may be retired from your job—you can never retire from being a mom
Watching your kids grow up and gain independence can be a bittersweet experience. On the one hand, you miss them. On the other, you finally get to focus on your needs, spend money on your wants—and also watch with pride as they make their way in the world.
However, some twist of fate may cause your child to return to the nest—or continue to rely on you for financial support—long after you’ve retired.
More adult children are living at home

According to a Pew Research Center analysis of U.S. census data, 15% of 25- to 35-year-olds lived with their parents as of 2016. That’s a 5% jump in the number of adults in this age range who were living in their parents’ home in 2000.1

In fact, young adults today are more likely to live with mom and dad than with romantic partners. And on average, those young people are staying at home for longer.

Generally, parents want to help their kids no matter what. But in the interests of encouraging your children to achieve autonomy—and protecting a nest egg that was only ever meant to support you and/or your spouse—you have to create some boundaries, and try to separate emotion from the situation.


4 tips to help them regain financial independence


If you find yourself retired—but not yet retired from financially supporting your child(ren)—here are 4 tips to help get through it:
 
  • Open up your doors—and lines of communication. Offering open-ended assistance for an indeterminate time can change a temporary situation into a permanent one, and turn your goodwill sour. A stay of a few weeks somehow ends up lasting months—even years. As the saying goes, guests, like fish, go bad after three days. However, when the guests are your children, it takes a bit longer than that to overstay their welcome. But there is an expiration date all the same.
  • Set up timelines. If your child is capable of supporting herself and is just going through a rough patch—maybe job loss or a divorce—you’re not doing him or her any favors by prolonging their financial dependence a day longer than is necessary. Encourage them to get back on their feet again by putting a cap on your financial support. Your love may be unconditional, but your financial support shouldn’t be. Don’t be shy about writing an actual contract that states the length of time your child can stay. And that doesn’t mean you’re going to kick them out on an exact end date. The point is working together towards the end goal of financial independence. So don’t be afraid to put an actual amount on it because that will give your grown-up son or daughter something to work towards. For example: “I am going to loan you $1,000, which I expect you to pay me back in monthly installments of $100.” Or: “You can move back home until you find a job, but then you’ll start paying me rent until you find a place of your own.”
  • Any job is better than none. Kids who have just graduated from college and are mired in debt should take any job. They may have to readjust their expectations, but as long as they’re working someplace where there’s opportunity for progression, they can be gainfully employed while continuing to search for their ideal role. Having an ideal is crucial, since it gives them something to aim for, but they also have to be flexible enough to take a job that falls short of that ideal in order to move ahead.
  • State (what may not be) the obvious. Fact: If you’re supporting an adult child as well as yourself, you are more likely to deplete your retirement savings. Most likely, you supported your child for their first 18 years, and even to a 38-year-old, that give-and-take dynamic feels natural and familiar. However, that same adult child needs to understand you are no longer of working age, that your roles have been reversed, and that even though your net worth is larger, it’s an amount that is decumulating rather than accumulating. Make sure your child really understands that your resources are finite—and how running out of money would affect not only you but them as well—especially since they may end up supporting you one day. 
     
Bottom line: Helping each other out in times of need is what families are all about. Having your adult children move back in for a while can strengthen your bond and deepen your relationship. Just make sure that your financial support has clearly defined boundaries. Otherwise, you may be jeopardizing your financial future, and that isn’t good for either you or your kids.
 

5 reasons to talk about estate planning

Teachers Insurance and Annuity Association of America has sponsored Ask the Expert posts for informational purposes only. Many of the experts are unaffiliated with Teachers Insurance and Annuity Association of America, College Retirement Equities Fund, and their affiliates and subsidiaries (collectively TIAA), and TIAA makes no representations regarding the accuracy or completeness of any information on the posts or otherwise made available by the experts. Statements of external featured experts are solely their own and are not endorsed or recommended by TIAA.
Responses from experts to questions posed by Woman2Woman community members are intentionally general in nature and are not intended to give personal, financial, or specific advice. Some strategies are complex, and more information is often needed to determine the personal needs of a community member. We strongly recommend that you consult with a financial advisor before taking any action based on an expertʼs opinion or other information you obtain from the Woman2Woman:Financial Living site so that all of your personal circumstances can be taken into consideration. Participation in the site does not render the member a client of the expert or of TIAA.
This site is not designed to accept or respond to requests or complaints regarding specific TIAA accounts, products or services. If you wish to discuss an issue of that nature, please contact TIAA at 800 842-2252. TIAA is not responsible for any opinions provided by members of this site. TIAA is not responsible for the content or privacy policies of third-party sites to which you may link.
The TIAA group of companies does not offer tax or legal advice. You should consult an independent tax or legal advisor for advice based on your own particular circumstances.
The material and responses are for informational or educational purposes only and do not constitute a recommendation or investment advice in connection with a distribution, transfer or rollover, a purchase or sale of securities or other investment property, or the management of securities or other investments, including the development of an investment strategy or retention of an investment manager or advisor. The material and responses do not take into account any specific objectives or circumstances of any particular individual, or suggest any specific course of action. Investment decisions should be made in consultation with an investorʼs personal advisor based on the investorʼs own objectives and circumstances.
Experts may not have medical or scientific training. Any information related to physical or emotional health is not intended to be used in place of a consultation with a physician.
TIAA is not responsible for the statements of community members. We may link to posts made by community members only to direct you to topics that may be of interest to you. This does not mean that we agree with the opinions of these community members. Their statements are solely their own and are not endorsed or recommended by TIAA.
243517