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Old 07-27-2011, 07:15 PM   #61
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Our daughter-in-law is a PhD scientist and our son is a software engineer. I am pretty confident that with their and our support our grand daughter will be able to afford college no matter what happens.
Aren't you concerned that with outsourcing to the low wage countries of Brazil, Russia, India & China (and their similar counterparts) and the massive importation of workers from there into the USA via the H1B & L1 visas as well as the artificial intelligence applications I had discussed earlier, that they will become unemployable at some time before their expected retirement age of 67? (OK, around here, at age 57 or even 47!)

BTW, I am a multiply degreed - and now utterly unemployable - engineer (aero & computer.)
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Old 07-27-2011, 07:20 PM   #62
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I think many of us believe our children will be resilient and resourceful enough to find a way to succeed in life - without having to bail on their obligations when the road gets bumpy or 'gaming the system' to look for an easy way out.
Hmm ...are you trying to say that hope is better than prudence? Or are you trying to say that everyone here feels that their children - who they believe will have the same economic survival skills as themselves - will be able to make it in the future because they have made it in the last few decades?

I'm afraid that the fundamental rules of the game have changed, and that most of us here if transported into the future would be stuck in the brutish economic situation that is to come.
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Old 07-27-2011, 07:45 PM   #63
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How are you guys paying for your kids' educations? Did you use 529s, UTMAs, or some other means? I've got a newborn so I'm looking for some tips.
I did a UTMA, only because 529s weren't around when I started it. I think a 529 has more advantages but do your own research.
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Old 07-27-2011, 07:59 PM   #64
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I hope to leave my daughter an inheritance but the best thing I can give her is freedom from having to worry about her Mother financially .
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Old 07-27-2011, 08:07 PM   #65
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My plan has always been to leave our inflation adjusted principal as an inheritance for my DD. However, as I've often told her, I plan for her to be so old when she gets it that she won't be able to enjoy it too much. So if she wants to have fun, FIRE or whatever, she'll need to do it on her own. Hopefully when she gets the inheritance she'll hold it and pass it on to her daughter. If she ends up having more kids, it could get diluted over a few generations. Of course, if circumstances change, DW and I might just spend it all. No way to know for sure.
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Old 07-27-2011, 08:28 PM   #66
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Do you mean being in the position of the DDIL ? The only way the rug would be pulled out would be if DS and we both decided to sell, which would require DS to screw over DDIL anyway. I don't see how that is materially different to if the couple owned 100% of the house (or at least, of the part which the bank doesn't own) and then had a break-up.

I would also add a clause allowing DS and DDIL to buy us out at any time. The point of the exercise is to get them a head start in the housing market, should they be living in a country where this is important. (Right now, DW and I are happy renting, but there's a lot more choice in the market for that in France or Germany than in the UK or the US, as far as I can tell.)
I don't know anything about the housing market in Europe (although I wish I did), but I can appreciate the necessity of a helping hand to get into the housing market.

For me, it's more of the dividing lines, like there is a lack of trust right out of the gate. If I was in those shoes, and my spouse agreed with the arrangement, then I would question the marriage in the first place.

An easier arrangement might be a loan to each of them $50,000 (legally written of course) then if there is a split, you can forgive your child's loan.
(edit: I see KingB has beat me to the loan idea)
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Old 07-27-2011, 08:31 PM   #67
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This is something my husband and I have been discussing recently. Not so much providing a nest egg but perhaps outstanding educational and other opportunities at least through college. It's something we are considering working a few extra years for.
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Old 07-27-2011, 08:59 PM   #68
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Old 07-27-2011, 09:09 PM   #69
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The idea is that if you were to leave a big enough nest egg, your descendants could live off of the interest (earnings) of that nest egg, and leave the nest egg to further generations, like Henry Ford and John Rockefeller did (obviously, you would not have to leave THAT big of a nest egg, but I think you get the point.) Wouldn't you feel that by living it up during your lifetime, that you would be harming them?
Not sure what you mean by living it up. If you mean spending the money I've earned and saved, then no I won't be harming them. If you mean in the larger sense that our generation has been living it up on SS, Medicare and big government hand outs, maybe.

And how would I go about getting such a large nest egg my family could benefit in perpetuity? How much would I personally have to sacrifice to ensure future generations do not? I believe that sacrifice is an important part of life. We must sacrifice to understand the value of what we have. But why must I be the only one? Why can't my children and their children make it on there own? Heck, most of us struggle to save enough to fund our retirements, but we must also fund a life of luxury for our progeny? I don't think so. People have made a life for themselves in times much, much harder than we face today.

And while those men you reference did great things, how many of their kept and coddled offspring have contributed anything near what they did? How many have contributed half of what you have? Running a foundation, giving away great-great-grandpa's money doesn't really count.

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I am much more pessimistic that you. I feel that the rubicon has been passed and that the economic value of labor is on an unstoppable decline. The only question is whether the future is one of a dystopian "Soylent Green" or a utopian socialist one (the only good future I can see as possible.) Either way, having a family nest egg will help your legacy feel good enough about itself to reproduce, thereby allowing your genes a better chance at winning.
I am not sure how to respond to that. A socialist "utopia" may be the best outcome, but it is surely not a good one. If that were to come to pass my savings and the next egg I leave won't matter one bit. The socialist will confiscate it long before they ever get to enjoy it.

As for my children's reproductive choices, I am not financing that either. They want kids, they better be ready to pay for them. My money will not be available to sooth their guilt.

I must say, you have a rather dark outlook on things. This country struggled to free itself from England, fought a bloody war amongst ourselves, suffered through the great depression and defeated the Nazis, but this recession is the end of times? I suspect we all have things a little too easy and need a little perspective.
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Old 07-27-2011, 09:19 PM   #70
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Aren't you concerned that with outsourcing to the low wage countries of Brazil, Russia, India & China (and their similar counterparts) and the massive importation of workers from there into the USA via the H1B & L1 visas as well as the artificial intelligence applications I had discussed earlier, that they will become unemployable at some time before their expected retirement age of 67? (OK, around here, at age 57 or even 47!)

BTW, I am a multiply degreed - and now utterly unemployable - engineer (aero & computer.)
Funny you should mention Brazil. Our daughter in law is from Brazil and came here on an H1B visa to do postdoc research in pharmacology. She now has her green card. Our grand daughter has dual US - Brazilian citizenship. In light of this, your arguments are probably not going to gain much traction with me.
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Old 07-27-2011, 09:24 PM   #71
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Funny you should mention Brazil. Our daughter in law is from Brazil and came here on an H1B visa to do postdoc research in pharmacology. She now has her green card. Our grand daughter has dual US - Brazilian citizenship. In light of this, your arguments are probably not going to gain much traction with me.
H1Bs are a major reason for falling wages among high skilled professionals. So in a way your D-i-L will have played a role in the decline of living standards here that will confront her daughter (your granddaughter) when she becomes of age.
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Old 07-28-2011, 02:48 AM   #72
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Having chosen to have children, we have an obligation to give them the "best" upbringing we can ("best" being both a subjective and a relative term).

Once they become adults, the obligations end. Anything else is gratuitous. That said, I hope/expect that there will be money left at the end of the day and, unless they behave in a manner which I find unacceptable, I would much rather it went to my children (or grandchildren if any) than anywhere else.
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Old 07-28-2011, 06:54 AM   #73
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I have set up Roth accounts for my kids and try to fund these accounts to the max allowed each year. I hate to leave any money on the table for tax advantaged events that expire yearly. My oldest son minored in finance at my request so he would have an understanding how to handle money and make it work for future needs. I will also help with 10-20K for home downpayment if asked. My general theory is pro 'family' wealth. Everyone under my umbrella should benefit from my plan and assets should be structured or passed down to maximize returns/income and minimize taxes and expenses.
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Old 07-28-2011, 07:11 AM   #74
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I have a feeling this entire thread is a:

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Old 07-28-2011, 07:24 AM   #75
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I don't know anything about the housing market in Europe (although I wish I did), but I can appreciate the necessity of a helping hand to get into the housing market.

For me, it's more of the dividing lines, like there is a lack of trust right out of the gate. If I was in those shoes, and my spouse agreed with the arrangement, then I would question the marriage in the first place.
I don't think it's up to parents to question their children's choice of marriage partners, other than perhaps in conversation between themselves.

When we got married, DW's parents told her, "You have to put your husband first now, ahead of us". It was a good piece of advice, which I also applied to my relationship with my parents. However, even for my FIL/MIL, the corollary does not apply: DIL/SIL will almost never be equal to DS/DD. If the marriage fails - which can happen for all kinds of reasons, many of which are simply not predictable on the wedding day (although I agree that plenty are) - then parental sympathy is rarely split 50-50.

I would hope that anybody whom DS/DD married would be able to appreciate that. But I don't want to come across like Robert de Niro in "Meet the Parents"...

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An easier arrangement might be a loan to each of them $50,000 (legally written of course) then if there is a split, you can forgive your child's loan.
(edit: I see KingB has beat me to the loan idea)
Ah, but I was also hoping to pick up a part of any gain in the value of the house. But the loan idea probably has other advantages too.
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Old 07-28-2011, 08:45 AM   #76
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I agree with the others that would like to leave money for their children as inheritance but do not feel obligated to do so. Heard a term in an article once "Economic Outpatient Care" for children. The term refers to paying for everything for your kid. We made our kids work from age sixteen and told them all along that we would pay for tuition, R&B, at our state university. Their work money paid for books and all incidentals. They each got or are getting student loans of about $3K per year. Thankfully daughter number one worked hard, got a job as a nurse in Baltimore, and has relocated there and has a nice little apartment. She can now pay for herself. One of her male friends, who received 100% funding by mom and dad, forgot their were deadlines to apply to graduate school and does not know what he wants to do in life... be a history prof or be a lawyer. Currrently he is working as a landscaper assistant. This is one story. Economic outpatient care can set the tone of making kids dependent. There have been several stories in the media recently about adult children still living with mom and dad.
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Old 07-28-2011, 09:20 AM   #77
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I've pondered a related idea before (possibly on this forum, I don't remember). I wonder if the disappearance of defined benefit pensions will accelerate the wedge between the "haves" and the "have-nots."

Let me explain. 50 years ago, DB pensions were much more commonplace. People would work for a company, build up a pension, and live off of it when they retired. When they died, they didn't have many assets (maybe just the house), and there were plenty of children to share in the pie, so each child's individual inheritance was a relative pittance. So everyone was on equal footing, with relatively few people inheriting substantial estates.

Nowadays, DB pensions are an endangered species. So many people are saving up for their own retirement. Their investment portfolios are providing a larger share of their retirement income than in the past. Of course, others didn't (or weren't able to) save much at all, and are scraping by on SS.

But when these couples die, the difference is that the "ant" parents are more likely to leave a large nest egg (compared to their DB-collecting 50's-era parents), to a relatively smaller number of children.

Doesn't this have the effect of concentrating wealth? Is this a risk in the future? Does anyone else agree that the vanishing of DB pensions could be a factor in a growing wealth disparity in the future? That there's an increase in intergenerational wealth transfer that's going to be amplified in the coming years, as more and more parents save up their own nest eggs (and pass them on to their children), rather than living off DB pensions (which leave nothing for the children, but leave people on more equal footing)?
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Old 07-28-2011, 09:30 AM   #78
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I would not feel obliged to leave anything to my kids (if I had some), but as some relatives and my parents left us modest inheritances I would try to pass on to my kids, too.

As we have no kids we will probably leave some to our nephews and/or nieces but we feel free to chose only those who are near and dear at the time of our departure or to use it up for a comfortable retirement.
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Old 07-28-2011, 10:18 AM   #79
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We don't have kids. I have a lot of siblings that are doing fine, and most of their kids are well educated and doing fine too. One niece has three small kids and they are not highly paid, so this year I will send her a gift certificate to help out at Christmas time.

We really need to create a will, but quite frankly if we both die at the same time I really don't care who gets it. We'll be dead!
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Old 07-28-2011, 10:25 AM   #80
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Nowadays, DB pensions are an endangered species. So many people are saving up for their own retirement. Their investment portfolios are providing a larger share of their retirement income than in the past. Of course, others didn't (or weren't able to) save much at all, and are scraping by on SS.

But when these couples die, the difference is that the "grasshopper" parents are more likely to leave a large nest egg (compared to their DB-collecting 50's-era parents), to a relatively smaller number of children.
I guess that is what bothered me about the use of the word "owe" in the original question. Owe implies obligation. Retirement savings implies pension replacement or needed extra suplement. I don't think someone should feel guilty because they lived too long or needed their retirement money. I don't think retirement money is for the heirs unless it happens not to be needed for what it was intended. A person can hope to leave some behind but cannot predict whether the future will accomodate.
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