Usually when people reach retirement age they find they are financially comfortable – and that’s a great thing. It means you’ve worked hard all your life and you’ve put away sufficient funds to provide for yourself. Retirement should be a time to relax and enjoy your life and family. Sadly, the best-laid plans can go astray and the cause can be the people who love you most: your family.
Family members are quick to notice that if you are able to provide for yourself in retirement, you must have a stash of cash somewhere. The temptation, then, for family members is to “relieve” you of some of that cash. This plays on the natural parental instinct to provide for and help your children. The cash is there within easy reach, your children have a need and so you draw down a percentage of your retirement savings. It’s so easy. It’s so tempting. It’s so bad. It should be resisted at all costs.
Focus on what giving away a chunk of cash might do to you and your chances of successfully funding your retirement right to the end. Think about the final years of your life and what it would mean if you ran out of money and only had the age pension to rely on. It’s a situation you wouldn’t enjoy, and you’d enjoy it even less if you knew the reason you’re in that situation is because of decisions you made earlier in retirement to give your children a bit of financial help that they might not even remember.
To be forewarned is to be forearmed, so I will run through the more common traps. This may not stop your family from taking advantage of you, but hopefully you will make better decisions in terms of helping family members out financially and so minimise the adverse impact doing so might have on your retirement.
This story is from the April 2021 edition of Money Magazine Australia.
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This story is from the April 2021 edition of Money Magazine Australia.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
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