The Street: Retirement Daily asks Rita Cheng, “Should You Give Financial Support to Family?”
By Robert Powell, The Street / Retirement
August 4, 2020 — About 24 million Americans have provided financial support to adult children due to COVID-19, and an overwhelming 71% of retirees said they would offer financial support to their family even if it could jeopardize their financial future, according to The Four Pillars of the New Retirement, an Edward Jones and Age Wave study.
The research also reveals that 20 million Americans stopped making retirement savings contributions during the COVID-19 pandemic and only a quarter of working Americans were on track with their retirement savings before the pandemic. What advice might you have for these Americans? I plan to print your comments verbatim on Retirement Daily.
Given these findings, Retirement Daily asked members of the Financial Planning Association to offer words of wisdom to those Americans who plan to offer financial support to their family, as well as those who have stopped making retirement savings contributions.
Here’s what Marguerita Cheng had to say.
“I would never tell a client not to assist their family or loved ones,” she insists. “It is so important to approach these conversations with empathy. Here is the advice that I think can be helpful. If a client’s family member has experienced a loss of income or reduction of income, of course — the client would want to help.
“Financial planning or revisiting the client’s financial plan can help the client understand the impact the ‘help’ would have on their situation,” Rita adds. “For example, maybe the client can’t help pay the entire mortgage until his/her family secures full-time employment, but the client can provide $500 per month support for six months or $1,000 per month for three months. In other words, a conversation about both the amount and duration can help guide the client.”