Rosalind Evans
In an age where life expectancy continues to rise, many young individuals face the unique challenge of financially supporting older family members while also trying to save for retirement. The World Economic Forum’s recent report highlights the global average life expectancy shift from 48 years in 1950 to an expected 81 years by 2100. With such projections, it’s evident that there’s a pressing need to adapt our perspectives on retirement planning. Especially for younger generations, the task becomes twofold: ensuring a fulfilling retirement for themselves while catering to their aging relatives’ needs.
Patrick Kilbane, a wealth advisor at Ullmann Wealth Partners, emphasized the urgency of the situation: “The recent World Economic Forum report underscores the need for young people to start planning for retirement yesterday!” To address this, several financial experts have stepped forward with advice for those in this predicament.
1. Prioritize Financial Education:
Michael Horne, CFP, managing director and senior wealth advisor at Mariner Wealth Advisors, suggests individuals first get themselves on solid financial footing. This involves understanding one’s finances and making informed investment decisions for long-term gains.
2. Add Compassion to Your Budget:
Kilbane offers a compelling metaphor: “Just as flight attendants…tell parents to place their mask on first before helping the children, I tell my clients they need to make sure they are on track to meet their retirement objectives before helping others.”
3. Leverage Tax Benefits:
Explore tax deductions related to dependents. Such tax benefits can bolster one’s savings and financial standing.
4. Reevaluate Retirement Plans:
Considering the rise in younger individuals expecting to support elderly family members, the traditional retirement age may need revisiting. A semi-retirement plan, where work hours are reduced, or roles are changed, can be an effective strategy.
5. Maintain Open Dialogue:
Horne stresses the importance of transparent communication with senior family members. In situations that could lead to emotional decisions, involving a third party, like a wealth advisor, can help navigate these crucial conversations.
As we witness increasing lifespans, traditional retirement and financial planning perspectives are evolving. For today’s younger generation, balancing their financial goals with their responsibilities towards elderly family members is paramount. But with the proper guidance, education, and open communication, they can pave the way to ensure a comfortable life for themselves and their loved ones.
