Happy Halloween everyone! For most of us, I think it’s going to be a very soggy Halloween! Ah well – more candy for me. 
. And now I’m going to cover a scary topic – why it’s so hard to save for retirement!
There was a recent post on Everyday Money on this topic. According to the article, a lot of boomers are approaching their retirement years without a lot saved up. Is it because they’re living high on the hog? Or because they aren’t good with money? While these may be possibilities, apparently one of the biggest issues is that they’re too generous!
Here are the top 3 issues:
- Spending for education (for their children, not themselves) has increased by 80 percent for 45 to 54 year olds, and 22 percent for 55-64 year olds.
- Spending on adult children has jumped as well – with almost 60 percent of parents giving adult children who are not in school financial support
- Spending on housing has gone up by 25 percent – due to house size and rising expenses (like, say – your kids moving back in!)
Wow. This is not a pretty picture. Most financial advice guru’s always say you should never sacrifice your retirement funds for your kid’s education. And yet, plenty of parents seem willing to do so!
I have to admit I’ve seen this is in my own extended family (ah, the joys of posting anonymously). My step-mother in law (yup, you read that right), has 3 children. At some point in time or other, all of her kids, and their spouses/significant others have moved back in with her and my father in law. Heck, my step-sister in law and her husband even got the master bedroom! And 2 of the 3 step in laws have moved back in with their own kids in tow. I can’t even imagine how much this has cost them over the years in terms of food, utilities etc! I’m pretty sure the moochers weren’t paying for much, if anything. My husband moved out a year after college, and hasn’t taken a thing from them since – not that they have any extra to give out! . They’re lucky they both have good pensions waiting or they’d be up a creek.
Do you have anyone like this in your family? Are you concerned your kids will clean you out?
I’m on the opposite end of this. My mother is the one who is trying to clean me out!
Michelle recently posted..Happy Halloween!
Ouch. Yes, I’ve read some of your posts about her, so I know it’s not a good situation..
I really don’t have anyone in my family like this. I think a lot of it comes down to how you’re going to provide for your children and your expectations of them as they reach adulthood. I plan to save money for our children’s education, but not at the risk of retirement saving. There’s no loans/scholarships to be had for retirement like there is for college, so I think the priority has to be on retirement saving.
John S @ Frugal Rules recently posted..Hi There, What Can You Tell Me About Yourself?
You are so right! My parents raised me to expect to stand on my own two feet, so I do. My step in laws are used to handouts – so they keep expecting (and getting!) them.
We were talking about saving money in an Emergency Fund last night on my page and one fan said “what money” there is no money. So if we are struggling to save a buck in case of an emergency you can bet retirement is the furthest thing from some people’s minds. Alternatively they are saving for retirement, hence no money for an emergency. I can see why some would struggle with the cost of housing and food that has and continues to go up. I also can see that technology and what kids want or need costs more money especially education. Then you have the kids who can’t get out on their own yet but are adults like one of our relatives who lived at home into early late 20′s just to pay off school debts. Life is not getting any easier that’s for sure. Mr.CBB
Canadian Budget Binder recently posted..Reader Question:Do I Have To Share My RRSP With My Spouse When I Get Divorced?
No, it isn’t. But hey – you don’t need to worry about your emergency fund, that’s for sure- it’s the best I’ve ever heard of!
I have three sisters and none of us live with our parents or take money from them, aside from Christmas presents and the like. They still don’t have anything saved for retirement, but that’s another story.
Jordann @ My Alternate Life recently posted..How to Get a Good Car Insurance Settlement
Hey Jordann – well, if they don’t have anything saved, they certainly can’t blame you guys from the sounds of things. And you’re never too old to still get Xmas presents!
My parents don’t have a lot saved for retirement either, but they’re approaching very soon to having the home paid off in full. Even with out that, they’re amazing at budgeting and can typically make $2 out of $1.
@Michelle
How’s your mom batting cleanup? (trying to clean ya out?)
Eddie recently posted..Budget Holidays in Canada
I’m very lucky – my parents have saved and my Dad has a great pension. If they can have their home paid off in full, that’s a great start!