Caring For Your Family Members While Preparing For Retirement
The newest generation of upcoming retirees is facing a more unique and prominent dilemma than past generations have experienced: caring for family members at the same time they’re preparing for retirement. There are plenty of reasons for this, such as life expectancy being longer, and aging in place becoming more common. This can mean many people approaching retirement are also assisting an older family member and some are also caring for children who may still be in school or starting college. Caring for family members may make planning and preparing for retirement a little challenging, so it is essential to consider a few things.
IRA Funds May Be Used for College
If you have a child planning to enter college around the time you retire, it is essential to verify that your IRA retirement funds may be used to pay educational expenses. If you are unsure if your child will need assistance with college or if they plan to go to college when you retire, you may want to continue to contribute extra money to your IRA, especially if funds may be used for retirement and for their higher education expenses. If you know your child will need financial assistance for school and they already have a education savings plan, you may want to consider adding more to it since you are able to do so without paying tax on the money.1
Long-Term Care Insurance Is Crucial
If family members depend on you financially, obtaining long-term care insurance for yourself and any elderly family members is vital. The cost of long-term care may quickly eat up your assets, resulting in financial problems for you and your loved ones. The sooner you obtain long-term care insurance, the better, as you will have lower premiums if you purchase it before age 60 or before any elderly loved ones go into a nursing home.1
Life Insurance Needs to Be Enough to Provide Care for Everyone
Many consider life insurance a salary replacement or for paying off significant assets such as mortgages. This leaves many people who are caring for family members without enough coverage to continue support for them in the event of their death. Consider all the expenses you would take care of for aging family members and your children to help decide on a life insurance policy amount that will prevent them from being in financial difficulty should you pass away.2
Professional Help May Be Necessary
If you have plans for your retirement that may involve traveling or time away from family members that you may need to provide care for, it may be a good idea to look into what professional care may be available. This may mean finding caregivers who are able to assist your loved ones or finding professional services such as meal deliveries that you may need to utilize. By considering what type of help you may need when you retire to take care of your loved ones, you will be better prepared when the time comes.1
Important Disclosures:
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. For advice specific to your needs, consult your financial professional.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
This article was prepared by WriterAccess.
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Footnotes:
1How to Factor Family Into Your Retirement Plan, Investopedia, https://www.investopedia.com/articles/personal-finance/101016/family-retirement-plan.asp
2Planning for Retirement as a Family Caregiver, Bethesda Health, https://bethesdahealth.org/blog/2022/08/26/planning-for-retirement-as-a-family-caregiver/
Sources
https://www.investopedia.com/articles/personal-finance/101016/family-retirement-plan.asp
https://bethesdahealth.org/blog/2022/08/26/planning-for-retirement-as-a-family-caregiver/