Planning for Retirement Across Generations: What You Need to Know

Are you in your 40s or 50s and thinking about retirement? Many people your age are juggling a lot – saving for retirement, helping kids with college, and maybe even caring for older parents. It’s a lot to handle, but smart planning can make it work.

Here are some factors to consider:

Balancing Money Responsibilities

Money can get tricky. You want to save for your future, but you also want to help your family. Here are some tips:

1. 1. Put yourself first: It might sound selfish, but saving for your retirement should be your top money goal. If you run out of money in retirement, you could become a burden on your kids.
   2. Set clear limits: Decide how much you can afford to help your kids or parents. Stick to this amount, even if it’s hard.
   3. Talk about money: Discuss what you can and can’t afford to do with your family. This helps everyone understand and plan better.
   4. Explore alternative ways to assist: Instead of just giving money, consider your time or skills to help.

Dealing with Caregiving

Many people in their 40s and 50s take care of their aging parents. This can be rewarding, but it’s also hard work. Here’s how to handle it:

1. 1. Plan: Talk to your parents about what they want as they age. This can help you avoid surprises later.
   2. Know your limits: Caregiving can be exhausting. Ask for help or look into care services if needed, which is okay.
   3. Take care of yourself: Remember your own health and well-being. You can’t help others if you’re burnt out.
   4. Consider the money side: Caregiving can be expensive. Look into long-term care insurance for your parents (and yourself) to help cover costs.

Planning for the Long Run

While juggling all these responsibilities, lose sight of your long-term goals. Here are some things to focus on:

1. 1. Save as much as possible: Try maxing out your retirement accounts, such as 401(k)s and IRAs.
   2. Invest wisely: Make sure your investments match your goals and the amount of risk you’re comfortable with. Work with a trusted investment counselor who can guide your decisions.
   3. Think about working longer: Working a few extra years can boost your retirement savings.
   4. Plan for healthcare costs: Healthcare can be costly in retirement. Consider a Health Savings Account (HSA) to help save for these costs.
   5. Get expert help: An experienced investment counselor can help you create a plan that meets the needs of your whole family.

A New Multigenerational Retirement Idea

An AARP survey finds that about one-quarter of U.S. adults over 50 who are not yet retired say they expect never to retire, and 70 percent are concerned about prices rising faster than their income. The biggest concerns are everyday expenses and housing costs, including rent and mortgage payments.

Living in a multigenerational household or planning to retire with siblings can have financial advantages. Pooling financial resources in retirement can provide a financial safety net and protection against financial hardship.

It’s an idea that’s catching on fast. The number of Americans living in multigenerational family households is about four times larger than in the 1970s.  Back in 2017, there were nearly 79 million adults in the United States living in a “shared household”— i.e., one including an “extra adult,” like a friend, adult sibling, or roommate. This number has risen by more than 20 million since it was first measured in 1995. It’s clear that the landscape of what it means to “grow up” and make a home is changing.

You could include this idea in your retirement planning.

Remember, planning for retirement isn’t just about money. It’s about creating a future where you and your loved ones can be comfortable and happy. By thinking ahead and making choices now, you can set yourself up for a better retirement – no matter your responsibilities.

Planning for retirement across generations can be challenging. Take it one step at a time, and be afraid to ask for help when needed. Your future self will thank you for all the hard work you’re doing now.

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Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.