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Boomers preventing their own retirement?
Old 09-21-2007, 09:32 PM   #1
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Boomers preventing their own retirement?

We receive lots of mail from people who have children asking how they can juggle their desires for financially planning their own retirement (and guilt over that) with their need to financially care for their children.

Since we are childless, many times our insights, advice or experiences are not taken seriously. What we call discipline or fiscal responsibility they sometimes call called cold heartedness.

Lately there have been articles written about the Boomers getting in the way of their own retirement due to the ad infinitum fiscal support of - first their own children, and then their grandchildren. The following article and book emphasize this point.

Comments?

Hey, boomers! Time to let the children go
Avril Moore
September 21, 2007
http://www.theage.com.au/news/opinion/hey-boomers-time-to-let-the-children-go/2007/09/20/1189881679659.html

Death of the Grown-up
Diana West
http://www.amazon.com/dp/0312340486/ref=s9_asin_image_1/002-3062042-5659218?pf_rd_m=ATVPDKIKX0DER&pf_rd_s=center-2&pf_rd_r=0329SY7VC14MW2YM6B2G&pf_rd_t=101&pf_rd_p =310664901&pf_rd_i=507846

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http://www.retireearlylifestyle.com/recent_headlines.htm

Be well,
Akaisha
Author, The Adventurerís Guide to Early Retirement
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Old 09-21-2007, 09:55 PM   #2
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Well, I'm in my early 30's, and my wife and I are just getting ready to have our first child. So all I can really comment on is our intentions: neither I nor my wife have any intentions of subsidizing our children's lifestyles once they graduate from college. My mom wasn't too harsh with me; after college she would have let me live at home for the purpose of saving for a house (similar to what's described in the article as the pre-WWII generation). However, I opted to move out and rent (much better choice IMO).

I've had friends whose parents have subsidized their early adulthood, and personally I think it's due more to the parents being unable to let go. It's selfish, and I think it does more damage to the children than the parents would like to believe.
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Old 09-21-2007, 10:07 PM   #3
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Our experience is that kids are really inexpensive and have no impact on getting to early retirement. They may indeed get you there faster because you may want to spend more time with them when they are teenagers.

But here are some unsolicited tips:
1. Kids don't need things, so don't get them much. A football costs less than $20 and can keep a 8 to 18 year old boy going all year. Throw in a basketball or soccer ball if needed. If they need something else (shoes?), make them earn some money to buy it.
2. Make sure that your kids are born one year later than your niece or nephew is born. You will get lots of free clothes until your kids leave home.
3. Public schools are free.
4. Bikes are a good mode a transportation for children. Make them use them.
5. From age 5 on, your kids should be doing the laundry, the dishes, and the yardwork. That's more leisure time for you.
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Old 09-21-2007, 10:33 PM   #4
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Yes, I have at least one friend who is paying for her 25 year old daughter's credit card bills. I have asked her why she does this and she says I would not understand because I don't have kids.
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Old 09-22-2007, 12:00 AM   #5
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Yes, I have at least one friend who is paying for her 25 year old daughter's credit card bills. I have asked her why she does this and she says I would not understand because I don't have kids.
We have 2 kids (20 & 22) and I don't understand this at all. Both in college, and they earn their own money. Out of college, off the payroll.
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Old 09-22-2007, 01:23 AM   #6
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CompoundInterestFan:
Quote:
Well, I'm in my early 30's, and my wife and I are just getting ready to have our first child. So all I can really comment on is our intentions:
From our website, our Preferred Links Page, Financial Info & Forums: http://www.retireearlylifestyle.com/links_financial_info_forums.htm the Cost of Working site is pretty good for those who are assessing the financial impact of having children, and possibly considering being a stay at home parent. Thereís an online calculator which is useful.

From the Lifestyle Choices page: http://www.retireearlylifestyle.com/links_lifestyle_newsletter_and_forums.htm The Dollar Stretcher link is excellent, The Simple Living Network, Freecycle and the Tightwad Gazette are all full of excellent ideas for teaching kids fiscal responsibility. Especially if you want to chat with others of like mind.

LOL! Great tips

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Yes, I have at least one friend who is paying for her 25 year old daughter's credit card bills. I have asked her why she does this and she says I would not understand because I don't have kids.
I get this as the #1 response. How could I possibly know anything about children, since I donít have any.

Many teachers donít have kids (like nuns), yet they are teaching children in schools.

I used to have 15 employees ranging in age from the school worker program in middle schools to college kids at the UCSC college. Some of them I had to teach how to make change - (these were the college kids!) Others I taught them to come to work after they bathed, so they werenít smelly or disheveled (again, the college kidsÖ) Among other things, I expected them to be on time and be responsible for their shifts. (everyone.)

We had an excellent employee who worked for us first as a dishwasher, then busboy, then waitperson. We even taught him how to cook. When we sold our restaurant, his mother called us up to thank us for giving him such a chance at life. She said the schools labeled him as learning disabled and this was the first real chance he had to prove himself capable.

I was both shocked and touched. This boy was an excellent employee, worked hard, and learned quickly.

But I guess I donít know anything because I donít have kidsÖ ?? Go figure.

Be well,
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Author, The Adventurerís Guide to Early Retirement
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Old 09-22-2007, 08:30 AM   #7
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I know a guy that always bailed out his kids. In fact, he still bails out a daughter and she is 46 years old. Does the same with her 22 year old son. He also works at the age of 70.
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Old 09-22-2007, 08:49 AM   #8
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We've found that taking care of grown kids is not an issue at all, they are quite independent. The real issue is taking care of aging parents.
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Old 09-22-2007, 08:50 AM   #9
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LOL great response. I almost thought someone was reading my mind. My wife is 70 and I am 67 we raised 4 kids and they did everything you mentioned, including mostly paying for their own higher education (3 with advanced degrees and one with "just" a RN 4 year degree). One tried to "come home" after serving his 4 years in the Army with a new wife. My wife virtually kicked him out after about 10 days. BTW being this "hard" on the kids did not hurt and IMO enhanced the relationship we now have with them. Interesting now to watch them raise my 9 grandkids and see much of the "training" is being repeated.
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Old 09-22-2007, 10:01 AM   #10
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I don't have any kids, but always figured I'd use my Dad's approach if I did. He sat each of us kids down during our freshman year of HS, and explained 'reality' to us. First he told us that our weekly allowance would increase to 75Ę (up from 50Ę ), if we wanted or needed more money than that we were free to seek employment at 16.

Upon graduation from HS we had 2 options available:

#1 - Go to college or trade school....he would pay for trade school, or 4 years of college....2 at local Jr College, and 2 at a State univ. We were also required to get a job....at least 20 hrs per week to pay non-school expenses (food, rent, gas, etc). If any of us wanted to attend college for more than the 4 years, it was up to US to foot that bill and/or get the loans and grants. After the initial 4 years, we were totally on our own, and out of the nest.

#2 - Get a job, and either pay 'room & board', or move out.

Each of us 3 kids chose 3 different paths. My oldest sibling went to trade school. The next oldest went to college. And I got a j*b. After college/trade school/full-time job, our parents never gave us anymore financial support. We adapted and became quite independent.

Both of my siblings will be w*rking until mid to late 60s....or beyond. The oldest was/is supporting his kids AND grandkids. The next oldest's kids are self-supporting, but she tries to live extravagantly on a not-so-great income. They never quite learned the LBYM strategy that our folks tried to instill in us! I learned it, applied it, and it paid off....FIRE'd @ 50!

So, I figured if my Dad's approach was good enough for us kids, it would be good enough for my kids if I had any.
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Old 09-22-2007, 10:42 AM   #11
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Since we are childless, many times our insights, advice or experiences are not taken seriously. ...
Yes, I can see where that would put you at a disadvantage.

Raising two children set back my retirement plans a few years, no doubt (just like buying too big a house might have). Of course, my wife and I feel that the pride, love, ongoing friendship, grandkids and other rewards exceed that "sacrifice" by galactic amounts for us. And we didn't let it ruin FIRE, just compromised a few years.

We also made them work for their nonessential "things" and lived a reasonably unflashy lifestyle ourselves. They went to public schools and public college and grad schools. Our goal was to get them through without educational debt (which was a ball and chain for me at that age) but they paid along the way.

I share your empathy for those who regret any major financial decision because it caused things not to work out for them in the end. Kids, investments, too big a house, a bad dot.com, whatever. And as for those who continue the pattern long after it is clearly destructive, well, it is sad.

Funny thing about kids, though. I'd do it again in a heartbeat even if it prevented me from every retiring until the day I died. Folks either understand that or they don't. Hard to describe.

BTW, I see our friends who chose not to be parents as being as content and satisfied as we are (that's why they're our friends ). We sometimes exchange reflections about how nice it must be at times to have kids/not have kids and can share the joys and trade-offs of both decisions. But none of us regrets our choices.
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Old 09-22-2007, 10:44 AM   #12
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(There is no reason why having kids should delay retirement, in my opinion... they only do that if you decide that is what you want to do, and I would never criticize someone else's personal decisions of that nature, either way.)

On the topic of my experience with my adult kid - -

Christina knew all of her life that she would be independent one day, and that we would pay for her college first if she wanted it (but that she would have to contribute as well, by working part time). Basically we gave her the same choices as Goonie's family gave him.

She transitioned into independence easily. She occasionally asks for this or that, just to more clearly define the boundaries, I think. I would regard it as an insult to her to start supporting her. One of the greatest gifts we can give our children is the pride and self confidence that comes from supporting oneself and steering one's own course into the future.

Occasionally (rarely), I do help her in emergencies and subtract that from her birthday/Christmas money ($200). She is independant, but still learning how to budget effectively. She refinanced/consolidated her credit card debt without asking me if that was a good idea (I would not have done that!). I told her gently and briefly what I thought about that, but tried to be tactful and then just let it be! At 29 she STILL does not want her mommy to tell her what to do, and has to learn from her own mistakes (sigh).

She has not delayed my retirement. Having married my spendthrift (and charming) ex, did. Well, I probably would have sought a divorce earlier but hung in there until she was 19, so in that sense I suppose she did delay ER. But that was my choice because I love her deeply, and since she was a very sensitive teen I did not want to put her through that at a younger age. It turned out that it still traumatized her and I feel pretty bad about that sometimes, though I know I cannot live my entire life for her.
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Old 09-22-2007, 12:15 PM   #13
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Having kids can help you retire earlier!!!

One of our incentives in LBYM and early retirement planning is to instill those values into our son as he grows up. IE not to fall into the trap of continuous, extravagant consumerism financed by debt which we are surrounded by where we live.

DD
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Old 09-22-2007, 01:15 PM   #14
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I fought with my parents to get a job at 14....and they did pay for 4 years of college which I chose to party through. However, once I graduated, I left home and worked three jobs to make ends meet. My parents have helped me out with a few major things, down payment on a condo and two cars....once I sold the condo, I gave my father a check for the downpayment.
Now, I manage on my own without asking for their help. I think it was mostly my pride that kept me from accepting their money. My brother on the other hand has only recently started working (residency) and my parents have definitely delayed their own retirement to pay for all of his schooling, his rent, his car, and his living expenses for the last ten years.
I think that my parents think of him and his career as an anesthesiologist as their "retirement money". It will be interesting to see how this plays out in the following years.
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Old 09-22-2007, 01:41 PM   #15
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Quote:
Originally Posted by Billy View Post
What we call discipline or fiscal responsibility they sometimes call called cold heartedness.
Lately there have been articles written about the Boomers getting in the way of their own retirement due to the ad infinitum fiscal support of - first their own children, and then their grandchildren. The following article and book emphasize this point.
I wonder which is more "cold-hearted":
1. Educating your kids on financial management, having them screw up practice it during their teen years under your tutelage, and then kicking them out of the house ASAP to help pay for your long-term care become independent functional members of society, or,
2. Neglect & malfeasance. Keep 'em blissfully ignorant, financially crippled, and dependent on you for the rest of your working years. Because you'll be working for the rest of your life!

It always takes longer to train someone than to do it yourself. But if you don't train anyone then you'll never be able to stop doing it yourself.

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Having kids can help you retire earlier!!!
Yeah, by forcing us to stop practicing a consumptive lifestyle, set priorities, and make long-term decisions that are better for not only us but our family.

Some people truly don't become motivated to start acting like responsible adults until after they have children... so perhaps the people who've decided not to have children are even more mature than the parents?

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Since we are childless, many times our insights, advice or experiences are not taken seriously.
No problem, send 'em to me. (Seriously.) I'll turn them over to our almost-15-year-old and she'll straighten them out in a couple weeks. Well, that option's available along with other more serious advice.

I've added up our child-raising costs in other threads and found them to be far below the media's widely-quoted $250K/kid number. That's living in Hawaii, using daycare for the first five years of her life, after-school care for another five years, and letting her eat convenience foods. Heck, we've probably wasted hundreds of dollars in other areas, too, like sports, and we've still spent over a third of her life as ERs.
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Old 09-22-2007, 01:57 PM   #16
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Hmmm - perhaps a different era.

1. I made it to 6 foot, 170. My Father was 6'3", 215 and did a long stint on Shore Patrol at the end of WWII.

2. I got room and board for two years of JC - provided I DID NOT buy a car! Asking for money would have got me an 'attitude adjustment'.

3. Upon graduation - I 'was given the opportunity' to help put younger sister thru since I was making the big bucks at Boeing.

heh heh heh - Oh yeah - my parents graduated from high school in the Great Depression - did not have a fun time until after WWII and spent their lives waiting for the shoe to drop - aka a depression to 'hit' again.

Luckily I have no children! I do give advice though! You can imagine the reception!
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The real problem
Old 09-22-2007, 02:59 PM   #17
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The real problem

is they can't teach what they don't know. Some will learn it on their own, others never will.
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Old 09-22-2007, 03:05 PM   #18
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I am curious what people's attitudes are about family estate planning to avoid estate taxes.

Anyone with more than a couple million in assets is looking at massive estate taxes in the future. Let's say you have health care provided by an ex employer and a pension that covers all your living expenses, so you don't have to worry too much about cash.

If your kids are genuinely hard workers, and you trust them, wouldn't you start to transfer your assets to them? Would this be different than supporting them, meaning paying for a lifestyle that they can't afford themselves?
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No, it isn't a lot different
Old 09-22-2007, 04:21 PM   #19
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No, it isn't a lot different

The best advantage though is you could direct where it should go, housing down payments, iras, grandkids education, low paying careers like teaching, charitable foundations with heirs as trustees providing lifetime incomes. The Millionaire Next Door discusses this Economic Outpatient Assistance and how demotivating it is. It takes a rare individual not to let it affect them which is why Buffet is only leaving small sums to his children.
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Old 09-22-2007, 05:15 PM   #20
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Funny thing about kids, though. I'd do it again in a heartbeat even if it prevented me from every retiring until the day I died. Folks either understand that or they don't. Hard to describe.
We feel exactly the same way Rich. After raising the family, I wasn't able to pull the plug until 58. I suppose I could have RE'd at least 2 or 3 years earlier if we had chosen to not have children. Absolutely no regrets. It's how I wanted to live my life and ditto for DW, so that's what we did.

Isn't it strange how parents who, for whatever reason, don't do a good job raising their kids get lots and lots of notice and you seldom here a word about effective parents?
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