When to Start Talking to Your Kids About Retirement Savings
Let’s talk about saving for retirement. Who’s doing it? Who’s not? And when should you start talking to your children about the importance of preparing for retirement, which seems so far away to them?
A 2012 report on HuffingtonPost.com noted that half of all Americans are not saving for their retirement. As you might expect, the younger the workers, the less likely they were to put money away for retirement: 56 percent of 18- to 34-year-olds weren’t doing it, and just one in three begin saving for retirement while in their 20s, the report noted.
Certainly, by the time young adults embark on a career, they should be thinking about saving for retirement. Taking advantage of an employer’s 401(k) program or starting an IRA offers many financial advantages. But do you really need to talk retirement planning with someone who’s not yet out of college? Or still in high school?
It’s never too early to begin teaching kids about managing a personal budget, provided that the lessons are age-appropriate. Parents will be the best judge of when their children are ready for such lessons, but at some point the importance of saving for retirement should enter their discussions with their kids about money.
For some youngsters, the conversation might begin when they get their first job and see Social Security taxes withheld from their pay checks. Or, parents may choose to show kids their own paystubs and explain the role of withholdings. Adults helping to care for an aging parent may also find a teaching opportunity for kids to learn more about money management and setting aside money for retirement.
Is it ever too early to begin talking to kids about the importance of saving for retirement? Each parent must answer that question for his or her own children. But one thing is sure, based on current retirement saving statistics – don’t wait until kids are adults and out in the working world since planning for a debt-free retirement is process that takes a while.
This article is provided for general guidance and information. It is not intended as, nor should it be construed to be, legal, financial or other professional advice. Please consult with your attorney or financial advisor to discuss any legal or financial issues involved with credit decisions.
Published by permission from ConsumerInfo.com, Inc. © 2013 ConsumerInfo.com, Inc. All rights reserved.
