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Why you might need to bake another $170k* into your retirement nest egg

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  • HiCOLAdoc
    replied
    My parents helped me financially with medical school and getting a start as a young adult.  It made the whole experience much more pleasant, and did not turn into the debilitating scenarios described in "Millionaire Next Door".  I didn't view it as mooching, nor did they feel that way about it.  I have been helping young adult relatives in my family as well, and I am glad to do so.  If you can afford to help relatives get a good start in life, why not do this?  As discussed above, I hope they will continue to 'pay it forward'.  WCI has written about his plans in this regard (I think it was termed a 20s fund).  Certainly agree however that one should not fund a lazy libertine, nor should one give away moneys that are needed elsewhere. If money is tight it wouldn't make sense, but if your own retirement is adequately funded this can be a rewarding way to spend 'extra money'.

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  • Craigy
    replied




    I wonder if that average number includes large one-time expenses (think wedding) rather than ongoing contributions. I think many of us would want to help with our children’s wedding expenses if we are able.
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    The moment I have a daughter is the moment I know I'll need to have an extra $100k laying around in ~20-30 years.

    Who am I kidding, a decent wedding will probably be at least a quarter million by then.     :cry:  :lol:

    And a couple decades from now, the groom's family will probably be expected to contribute at least half, too.  So there's truly no escape...   :P

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  • LizOB
    replied
    I wonder if that average number includes large one-time expenses (think wedding) rather than ongoing contributions. I think many of us would want to help with our children's wedding expenses if we are able.

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  • Zaphod
    replied
    I dont see anything wrong with taking care of your parents, if you can I'd say its the right and good thing if other issues are otherwise good.

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  • Craigy
    replied










    Is this more an issue with today’s kids and young adults ? I made money starting in junior high and high school. The idea of mooching off parents never entered my mind.
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    Mooches have existed since the beginning of time.
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    Is your (hypothetical) 21 year old daughter with profound anorexia nervosa a moocher? Perhaps she is to me, but I am not sure that you will consider her to be a moocher.
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    In a literal sense, yes she would likely fit the definition.  Though to the extent the mooching is due to an infirmity it would lose its negative connotation.

    What about the hypothetical daughter who is a profound vegan and needs extra money to buy all of her organic vegan groceries and eat at expensive vegan restaurants, and refuses anything else?  Yeah, that's probably a mooch, with a big helping of negative connotation.

    My 1 year old is a complete moocher, but that's a fact we celebrate.

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  • RogueDadMD
    replied


    I did not bring up the “m” word, other posters did.
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    My comment wasn't directly specifically at you.  Just following up on the word that was brought into the conversation.  My entire point is that it's all contextual to the family, which I think is what others are saying as well.

     

    I had to google McLaren as well.  It's a fancy car thing that usually costs 6-figures, sometimes as high as mid 6 figures apparently.  As far as I know the money is legitimately earned.  Doesn't bother me that he has it. My parents bought me a car (Mazda 626) when I was in college -- that put me eons ahead of most of the people I knew at my state university.  When they bought it I basically just took whatever my dad thought was a good car/deal -- I test drove a few things but didn't really give input.  I didn't feel like I had the right to give a lot of input given that I wasn't paying for the car.

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  • Drsan1
    replied
    I would not "budget  in" extra money in my retirement account for adult child expenses! Once we raise them and provide for them to adulthood our "obligation" is done. 529 plans are extra for them and not a requirement but most high earners do it. I'm not saying when my three kids are adults I wont help them or give them things, but I will only do it if it is in my budget and I want to do it. Kinda how people are told to max out retirement accounts before saving for college.

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  • q-school
    replied
    sometimes rich people have nice stuff because well they are richer. If you don't have the desire to leave the largest possible estate to your child, most people on this board will reach so called escape velocity in their fifties or sixties. At that point, there's no real point in delaying gratification aside from maximizing size of estate for whatever purpose.
    So if people really don't feel they are giving up anything and saving that's wonderful. They will accumulate more and more wealth. However if they want to use the resource and have been holding back to achieve financial security then suddenly fancier cars and vacations are the new normal. Sometimes it is harder to flip the switch than you might think.

    A nurse I work with has never left the area. Her grandmother passed and she inherited 8 figures. Grandmother never went to college or left the area. Mother never went to college or left the area. This nurse has had the money for five years and decided to get new car. Bought used edge with fifty thousand miles or something. Always clipping coupons.
    Different strokes.

    I assure you that if I inherited eight figures my wife would be making extensive travel plans. My kids already will start life financially way better than I did. They won't need to save as hard as me. Statistically there is a high likelihood they will earn less than my wife and I. Hopefully not so they can buy me a mclaren rather than used edge and not miss the money.

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  • White.Beard.Doc
    replied
    Every adolescent and young adult is a unique individual.  When parenting, there is no "owner's manual".  I wish there was as life would be so much easier.

     

    If a young adult is taking care of the business of building a productive life, giving help is known as "support".  Alternatively, if my adolescent or young adult is not taking care of the business of building a productive life and a secure financial future, then similar forms of help may be more accurately referred to as "enabling".  Poor financial decisions have consequences.  A degree of pain and struggle may help strengthen those tough lessons.  My hope is that learning some of these tough lessons will lead to change, sooner rather than later.

     

    One of my adult children is a voracious saver and investor; she has a huge bank account and multiple taxable and tax deferred investment accounts for so very early in her career.  Another child has credit card debts and spendthrift ways.  Some tough lessons from the real world feel in order.  And it is amazing that each of these uniquely different individuals have the same genes, the same parents and grew up in the same household.  Isn't life interesting!

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  • Zaphod
    replied







    Is it considered parents mooching off kids when the kids support them when they are infirm (to a degree)?  In many cultures that’s the norm.  It’s also a cultural normal that parents continue to support kids in some ways even after the kids are grown, partly with the idea that the kids pay it backwards to the parents when they are old, and pay it forward to their own kids.

    That goes to extremes — for some it’s just the parent supporting education for the kid/grandkids, but I also see it being far more extreme.  I have a childhood acquaintance who is near the end of a cardiology fellowship and driving a McLaren.  Sufficed to say he didn’t buy it by moonlighting a lot and eating Ramen.
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    I did not bring up the “m” word, other posters did.

    In my world, parents do what they can to see their children succeed, maybe even help out with the grandchildren, with no expectation other than that the future generations continue to pay it forward to the extent that they can.

    I would have to google “McLaren” (it’s some expen$ive car thingy, right?), but if the parents can afford it with legitimately earned money, who am I to judge?
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    There definitely are qualitative differences. If your kid is doing well and getting after life in general, I dont see too much issue with "helping" them achieve other things even faster. Its those that take help and it decreases their drive I am more concerned about. Always hard when it actually happens.

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  • VagabondMD
    replied




    Is it considered parents mooching off kids when the kids support them when they are infirm (to a degree)?  In many cultures that’s the norm.  It’s also a cultural normal that parents continue to support kids in some ways even after the kids are grown, partly with the idea that the kids pay it backwards to the parents when they are old, and pay it forward to their own kids.

    That goes to extremes — for some it’s just the parent supporting education for the kid/grandkids, but I also see it being far more extreme.  I have a childhood acquaintance who is near the end of a cardiology fellowship and driving a McLaren.  Sufficed to say he didn’t buy it by moonlighting a lot and eating Ramen.
    Click to expand...


    I did not bring up the "m" word, other posters did.

    In my world, parents do what they can to see their children succeed, maybe even help out with the grandchildren, with no expectation other than that the future generations continue to pay it forward to the extent that they can.

    I would have to google "McLaren" (it's some expen$ive car thingy, right?), but if the parents can afford it with legitimately earned money, who am I to judge?

    Leave a comment:


  • RogueDadMD
    replied
    Is it considered parents mooching off kids when the kids support them when they are infirm (to a degree)?  In many cultures that's the norm.  It's also a cultural normal that parents continue to support kids in some ways even after the kids are grown, partly with the idea that the kids pay it backwards to the parents when they are old, and pay it forward to their own kids.

    That goes to extremes -- for some it's just the parent supporting education for the kid/grandkids, but I also see it being far more extreme.  I have a childhood acquaintance who is near the end of a cardiology fellowship and driving a McLaren.  Sufficed to say he didn't buy it by moonlighting a lot and eating Ramen.

    Leave a comment:


  • VagabondMD
    replied




    Is this more an issue with today’s kids and young adults ? I made money starting in junior high and high school. The idea of mooching off parents never entered my mind.
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    You have previously described your mother actively trying to mooch of you (though the word "mooch" was not used, IIRC). In my world, the idea of parents mooching off their children never entered my mind.

    Leave a comment:


  • VagabondMD
    replied







    Is this more an issue with today’s kids and young adults ? I made money starting in junior high and high school. The idea of mooching off parents never entered my mind.
    Click to expand…


    Mooches have existed since the beginning of time.
    Click to expand...


    Is your (hypothetical) 21 year old daughter with profound anorexia nervosa a moocher? Perhaps she is to me, but I am not sure that you will consider her to be a moocher.

    Leave a comment:


  • Craigy
    replied




    Is this more an issue with today’s kids and young adults ? I made money starting in junior high and high school. The idea of mooching off parents never entered my mind.
    Click to expand...


    Mooches have existed since the beginning of time.

    Leave a comment:

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