Should Financially Secure Boomers Help their Millennial and Gen Z Kids? Thought Provoking Example...

[Qs Laptop]

If you want to give money to your kids now, then go ahead and do it. You do not need permission from me or anyone else.

Well, that's the point of my post. I'm trying to decide if I want to do this or not and am asking for opinions on it.

 

[momoney]

Well, that's the point of my post. I'm trying to decide if I want to do this or not and am asking for opinions on it.

I'd consider things that would give them more time to spend time together and with you. Anything from taking them out to dinner, a theme park, a vacation, air fare for visits, a pool at your house for grandkids or a vacation home where you all get together. Something that creates family memories. That doesn't always take a lot of money. It's up to you.

 

[cathy63]

It's the "should..." phrasing in the thread title that's turning me off. We will help our only child because we "want" to, not because we "should".

We are talking about buying a home for her to live in with some inherited money that we don't need for our own retirement. If we don't do it, then she's going to be paying rent for many years to come and the money will sit in our portfolio until we die (when she's hopefully well into her 60s). Mathematically, she'll most likely have more money in 50 years if we buy her a home now than if we don't, so if we think in terms of generational wealth, it makes sense to do it.

 

[Kings over Queens]

Well, that's the point of my post. I'm trying to decide if I want to do this or not and am asking for opinions on it.

I didn't see any mention of you actually looking for thoughts on you gifting to your kids, but rather, a generic conversation based off a random internet post.

since we're talking about a real life deal, I'll ask, why do you think you want, or what might be holding you back?

for my purpose, my 3 adult kids (26, 25 and 24) are responsible, work, and all have money in the bank. They've paid attention to the life examples and expectations we've drilled into them all these years. I see no reason to stroke my ego with a large balance sheet when that same money can be used and enjoyed by them during the more financially challenging times as they build their lives and at the same time, the end goal is to help build generational wealth.

I've told the kids and my wife, I want this money to be fun, and for all of us to enjoy it.

This is an example of why I want to do it now, rather than wait.

 

[MichaelB]

I'm the OP and I'd like to get this thread back on track.
./.
This is about:
This idea of "gifting with a warm hand" is big around here. If the millennial kids are going to inherit the money anyway, why not let them have some of it now, when they really need it as opposed to when they are in their 50's and the grandkids are already out of college?

Well, that's the point of my post. I'm trying to decide if I want to do this or not and am asking for opinions on it.

To know with certainty one will leave substantial money to heirs implies (to me) a level of wealth I certainly don’t have and suspect very few do, both here and in general.

I make gifts to my adult children but I don’t want to motivate them to reduce their own efforts to get ahead and plan for the future. To reconcile this I gift directly into their retirement accounts and help pay for education and school programs for my grandchildren.

Education, schooling and after school programs for my grandchildren are a high priority for me and cost significantly more today than it did when my children were in school. This is where I choose to help.

 

[brett]

Everyone's situation is different. It is often difficult to judge if you are not aware of all of the facts or the family situation.

Our first goal is to reserve funds for each of our grandchildrens (four at the moment) post secondary expenses. With a current fund and through our respective wills with each of them getting first cut from our estate for this purpose should we pass away.

After than, to provide each of our two children with some help on their future retirement plans.

We feel fortunate that we are in a financial position to do this.

 

[Music Lover]

Well, that's the point of my post. I'm trying to decide if I want to do this or not and am asking for opinions on it.

Why not start by giving them a little bit and see what they do with it?

 

[djsander]

I am a GenXer. I'm 50 and I have yet to receive a single cent from my well-off father. He has helped my sister plenty (she's been living for almost free in one of his condos for 15+years, she always gets my dad's paid off 4-5 year old car when he upgrades, and she seems to be highly favored in his will). And the funny thing is, my father truly seems to believe that he has always treated us equally. All my cousins have received money from their parents for a downpayment to purchase their first home. One uncle of mine even offered a home to each one of his children when they were in their 20s and they never had to pay rent or a mortgage payment in their life. I am the only one who has received zilch. I left home at 18 and always paid my way. It builds character. Nothing got handed to me. What I own is mine and mine only and I feel a ton of pride about it. I depend on no one. I owe no one. I can tell people to F off. And I have to say that I am better off than almost everyone else in the family, which ironically makes people who had stuff handed out to them really jealous. They even have the nerve to come hit me for money every once in a while.

Don't covet other people's stuff. Build your own. And in the OP's case, stop whining you baby, if you wait long enough you'll inherit $10M one day. Am I supposed to cry about it?

It could be your sister or relatives have asked and you’re not going to due to your nature. I never asked my parents for anything nor have I expected anything. I never have received anything. I know my oldest brother who has since passed received money from my father and step-mother and also lived off and on with our mom.

 

[skipro33]

I'm the OP and I'd like to get this thread back on track.

This is about:
This idea of "gifting with a warm hand" is big around here. If the millennial kids are going to inherit the money anyway, why not let them have some of it now, when they really need it as opposed to when they are in their 50's and the grandkids are already out of college?

Well, that's not at all what I got from your original post. Nope. But with your new question, why not let them have some of it now, I would not. I know for a fact that discovering I was responsible for my own fortune, good or bad, ensured I learned how to manage money. Gifting money does the exact opposite of that. IMHO that is.
What they really need is not free money. What they really need is to learn to ask dad, how do I become successful financially like you. When your kid asks for that instead of a handout, then you've done right raising them.

I'm not heartless, I've loaned both my sons money, interest free, so that they could buy homes or qualify for low(er) interest rates. I've also loaned them money for home improvement projects they could use now rather than wait a couple years, as it made sense for them as a family. A swimming pool is such a loan I made so they had the pool while their kids were living at home. Turned out great! He paid me back in 1 year, not two. Pool completed right before COVID hit. He told me a couple months ago, it now takes over a year to get a pool built and the cost has tripled. Glad I was able to help him and super glad he was grateful and not greedy for my money.

 

[Route246]

I'm the OP and I'd like to get this thread back on track.

1. Never mind that the post might be "fake". It's merely a launching off point to get into the discussion.

2. This is not about buying high schoolers cars or paying for your child's education. This is about children of boomers now in their 30's and 40's with kids that are struggling to make ends meet (and let's assume they are not spending their money on imported organic food for their pet iguanas, but have real needs.)

3. This is not about your personal experiences when you were in your teens, 20's, or 30's. Nor is it about your extended family or your neighbors.

This is about:
This idea of "gifting with a warm hand" is big around here. If the millennial kids are going to inherit the money anyway, why not let them have some of it now, when they really need it as opposed to when they are in their 50's and the grandkids are already out of college?

We face this problem and it is a very nice problem to have.

The first problem is those who are contemplating giving have to rationalize passing judgement as to if it is deserving or undeserving. This is just a moral decision and very personal.

The biggest problem is demotivation. Even giving $20 into a savings account can demotivate in a small way. It would free up $20 or a part of $20 to not work extra hard to earn that $20. $20 is figurative but hopefully the point is taken. By giving $20 or $20K or $20M am I demotivating the receiver from working hard, demotivating them to take their foot of the gas and demotivating them to not take chances, avoid failure and perhaps miss opportunities to do great things? I watched a friend do just this as his adult kids are all demotivated because they know their dad is rich and they don't have to think about financial security, especially in retirement so they can spend whatever they make now and save nothing. This is a dilemma.

 

[Qs Laptop]

I didn't see any mention of you actually looking for thoughts on you gifting to your kids, but rather, a generic conversation based off a random internet post.

I thought if I kept it generic, and not personal, I would get unfiltered responses.

since we're talking about a real life deal, I'll ask, why do you think you want, or what might be holding you back?

I don't want them to expect gifts of money or rely on them.

I've got a 27 year old and a 24 year old. Both are responsible, have good paying jobs, and have banked at least $100K between their savings accounts, Roth, and 401k's. We did give them approximately $20K each upon graduation from college, which was their inheritance from Grandma. This was in a Fidelity investment account. They had no idea this money was coming their way, which is how I had planned it.

I am not wealthy, not compared to some around here, but I am comfortable. Like you, I don't see why I should sit on this money until I pass away, which hopefully is not for another 25-30 years, Lord willing. I could be enriching their lives and making it a little bit easier for them while making me feel good.

 

[skipro33]

And the funny thing is, my father truly seems to believe that he has always treated us equally.

He did. He gave when asked. How's that his fault you didn't ask like your sister did?

My story is similar to yours. Later in life, I asked my dad about it; why he gave my sister so much and nothing to me. He said she needed it and that he was proud I was so successful to never have needed his money or even to ask him for any.

 

[rembrandt]

When I was 25, my father gave me a check for $5000 because he felt guilty for mistreating me as a child. Little did I know that it would be my total "inheritance".

 

[SecondCor521]

If the millennial kids are going to inherit the money anyway, why not let them have some of it now, when they really need it as opposed to when they are in their 50's and the grandkids are already out of college?

I've been gifting with a warm hand for several years and plan to continue. However, there are several reasons one might not:

1. Economic Outpatient Care.
2. Entitled / bratty attitude.
3. Might need the money / fiscal conservatism.
4. Might just prefer to give to charity rather than kids, at least in part.

For me, at the moment, only issue #1 is of possible concern, although I sort of monitor for all four.

 

[brett]

I do not believe that treating children equally necessarily means dollar for dollar.

We paid for both children's post secondary and one graduate school. One was considerably more expensive than the other. It hardly means that we have an obligation to match funds to the daughter whose edu expenses were much less.

My daughter had exactly the same committment from us. Her path happened to be different and we feel zero obligation to 'even' things up from a monetary perspective. That was not the offer on the table.

Ditto for grandchildren. They are currently all to one daughter. Son as none at the moment. Our commitment was to fund post secondary edu for grandchilden. No intention of working out how much my daughter's children will get and then giving equiv. cash to our son. The offer on the table relates to grandchildren, not our children.

In speaking to our children they wholeheartedly agree with the approach we have taken.

 

[Kings over Queens]

I don't want them to expect gifts of money or rely on them.

so tell them that.

My daughter thus far has enjoyed the largest gift, a car. She was alone in denver, and expected to pay for it herself but needed help figuring out what she could afford. The boyfriend she moved out there with abruptly left and came home. She was shocked when I told her I'd pay for the car. i told her that she earned it, that if she hadn't displayed such a strong work ethic, accepted responsibility and was by and large a good person, I wouldn't be doing it. I further explained, it made no sense for the money to sit in my account doing nothing when we both can enjoy it, now. My wife and I know she's got safe reliable transportation and won't have to sell blood to pay bills. win/win

How about starting the conversation like this.

"I'd like to give you (this) because of (this reason), with the understanding that there are no strings attached." "would you be comfortable with that?"

 

[obsessed]

This conversation is all well and good but the original post from Reddit looks very click-baity to me.

 

[FIREd]

He did. He gave when asked. How's that his fault you didn't ask like your sister did?

Did I say it was his fault?

When I told him that I was getting a divorce, before I could ask for anything, my dad told me “don’t count on me to help you financially”. I had no intention to ask mind you, I was already FI (though he didn’t know that)… so there goes the theory that those who ask shall receive.

 

[youbet]

There are a lot of embellished posts on Reddit (where the OP’s screen capture was originally posted) that are trolling the readers for enraged comments.

"Trolling the readers for enraged comments?" Oh no, never, that just couldn't happen on Reddit!

 

[Texas Proud]

I'm the OP and I'd like to get this thread back on track.

1. Never mind that the post might be "fake". It's merely a launching off point to get into the discussion.

2. This is not about buying high schoolers cars or paying for your child's education. This is about children of boomers now in their 30's and 40's with kids that are struggling to make ends meet (and let's assume they are not spending their money on imported organic food for their pet iguanas, but have real needs.)

3. This is not about your personal experiences when you were in your teens, 20's, or 30's. Nor is it about your extended family or your neighbors.

This is about:
This idea of "gifting with a warm hand" is big around here. If the millennial kids are going to inherit the money anyway, why not let them have some of it now, when they really need it as opposed to when they are in their 50's and the grandkids are already out of college?

Thread drift is here and here to stay.... and I would bet that this thread will drift again...

The big question I have in you post is WHY are they struggling? My DS is in Seattle which is a HCOL area... he bought an $800K condo... he works hard for his money... his DW works hard for her money... they take on side jobs... do not spend money on things they do not need.. heck, his DW drives my mom's old car we gave him when he was in college...

So, without knowing WHY I am in the group that thinks the article posted is from crybabys who have friends etc. who are getting money from their parents and they are not... heck, my DD is in college and most of her friends parents give them WAY more than I am willing to do... I am teaching my DD how to handle money... it will pay off when she graduates...

 

[youbet]

Thread drift is here and here to stay.... and I would bet that this thread will drift again...

Thread drift in this case is a hoot since it's not really thread drift, it's gossip hounds getting hooked on a Reddit click-bait post........ !

 

[anothercog]

I plan to make sure my kids graduate college debt free. Their 529s are fully funded for state school so that's where I'm directing them. There will likely be money left over that i will direct to their Roth IRAs. I'll also likely help them buy a car post graduation if they need it. Something modest and inexpensive.

Beyond that, I don't expect to give them living expense money. They can live at home for modest rent through their 20s if they wish so long as they are working or going to school.

I think I'll be long since retired and nearly dead before I see grandkids so I think I would happily pay for daycare/private school if I have the funds available when that time comes so long as I don't see the parents blowing money on crap.

In the OP's example, if the debt was caused by child-care costs, I may offer to help cover some of that, but again, not if they are blowing money on expensive vacations and "stuff."

 

[Dtail]

He did. He gave when asked. How's that his fault you didn't ask like your sister did?

My story is similar to yours. Later in life, I asked my dad about it; why he gave my sister so much and nothing to me. He said she needed it and that he was proud I was so successful to never have needed his money or even to ask him for any.

My sister recived a separate account before my father passed worth 200k. It was set up due to my parents believing she might need more support. Turns out her spouse is very successful.
Hey you never know.
I am in control of all my mom's investment accounts, so all things are equal going forward. lol

 

[Route246]

I've been gifting with a warm hand for several years and plan to continue. However, there are several reasons one might not:

1. Economic Outpatient Care.
2. Entitled / bratty attitude.
3. Might need the money / fiscal conservatism.
4. Might just prefer to give to charity rather than kids, at least in part.

For me, at the moment, only issue #1 is of possible concern, although I sort of monitor for all four.

All good points.

Are you concerned about demotivation? It is our biggest concern. We can certainly afford to buy them out of anything they need or want but we have seen too many cases where children become demotivated, not only from working and taking chances but demotivated from saving, sacrificing and deferring.

 

[CardsFan]

So, How about this scenario;

We helped DS early on during and after college. He has no college debt, and has expressed his gratitude for this many times. Gave him a car, loaned the down payment for a house, and small stuff here or there. He was very independent, and never asked for more. Back then, we could afford it, but our FI plans were not fully realized.

Today, he is married. Between them they make over $200k (probably closer to $250k). They have bought a new house in a great area, close to her mom and dad. They are in Chicago area, we are STL area. They are doing fine. They take at least one nice trip per year, which we encourage (save, but also enjoy your selves).

We now are in the position that we can afford to give more, BUT, they don't appear to need it, AND I know her parents are not in the same position.

So, we don't want to upstage the other set of in-laws, and there is no apparent need. No Grand kids yet, and don't foresee any (that would be a no brainer to fund education funds)

What would you do?