When adult children struggle financially, they look to the parents for support. This is true of the boomerang kid and the ones who live on their own.
As a rule, the fewer dependents and debts you have, the less insurance you need. You reach retirement. You’ve paid off the home. Your children are grown and out on their own. But, most importantly, you have the money in place to live comfortably. That’s exactly how it works, right?
Maybe in a perfect world, but the LIMRA Secure Retirement Institute tells a different story. They report that 63% of parents over 55 are still supporting their children and grandchildren.
The BMO Wealth Institute found 81% of parents have provided financial support to their adult children. The report goes on to say 36% of them provide it frequently or ongoing. The reasons why vary:
- Student debt
- Credit card debt
- Family dynamics
- Save some money
Whether they’ve boomeranged home or live on their own, adult children struggle financially and look to their parents for support. Over time, they grow to depend on their parents for financial help.
Parents expect to help their children financially. They appreciated the help they received from their parents and want to pass that on to the next generation. So much so, the BMO report says:
- 47% of parents are preparing to retire later or work longer
- 34% are helping their adult children despite knowing it may make for an uncomfortable retirement
- 30% are saving less for their own retirement
How Are Your Insurance Needs Impacted?
At the end of the month, how has your boomerang kid affected your financial health? What if you become critically ill or pass away, could those who depend upon you survive financially?
You need to consider the financial needs of your spouse. But, your departure plan now must to address those of the adult children you support. Could your spouse manage the finances, as well as continue to support your children without supplemental income?
From another perspective, think about the sacrifices and steps you’ve taken to help support your adult children. Have you mortgaged your home? Taken a withdrawal or loan from your retirement account? Reduced your savings rate? Your debt obligations may be higher and your savings may be lower than you expected during this season of life.
An insurance policy can help settle all of those concerns with a lump sum, tax-free payment to your surviving spouse. It could provide financial comfort while still allowing for continued support of your adult children as needed.
With the right insurance policy, you’ll be taking care of your family even in your absence. As a parent, you’ll gain peace of mind knowing you’ve done your best to leave them with a comfortable financial future.