Jul 16 2010

The Road to Retirement Includes More Than Just Yourself

As a guy in my early 20′s, the scope of my financial concerns does not extend far beyond myself and my immediate family. Being the independent person that I am, I seem to have adopted a selfish outlook when it comes to my future with money.

When I look at my parents, hard working immigrants who spent the last 23 years in the U.S., their family has often placed them in tough positions when it comes to money.

Through their experiences, I can see the many impending financial obstacles that would trouble me as well.

The Typical Thought Process
Not yet introduced to the many other burdens of life, I disregard them when I go off planning for retirement. Evidently, I’m not the only one who puts little thought into the financial situations that our futures will present. Most young adults coming out of college think of climbing the corporate ladder, becoming rich, and splurging on the many luxuries offered in life.

Many are not even thinking about retirement – those that do, often think about themselves and themselves only, just like me. Now that I’m conscientious about what the future may hold, I need to account for the twists and turns along the road towards retirement.

A Very Bumpy Road Ahead
For those who like to set goals, one of them may sound like this:

“I want to become a millionaire by the age of X.”

Well… throw these people into your calculations and figure the probability of that statement coming true.

  • The spouse. Retirement will become a worry for two people. We must take account of contributions that each person will make towards the desired retirement lifestyle. Should the wife stay at home? Should I take a second job? The dynamics of financial planning changes every time another person enters the picture. A spouse can delay or accelerate the realization of retirement. From the time the relationship starts getting serious, one’s money no longer concerns only one person.
  • The parents. Turning away those who raised you is a despicable act. So when mom and dad needs money, it’s nearly impossible to say “no”. The major financial responsibilities arise when elderly parents begin suffering the health problems that come with old age. Should the parents have difficulty paying the medical bill, it’s up to the children. And not to forget, this applies to the in-laws as well.
  • The children. The word on the street is that the average cost to raise a child in the United States from birth to 18 years of age is roughly $250,000. That amount doesn’t include a college education. And, that’s only for one child – dare you have two? A small sigh of relief results from the possibility that your children may help support you when you reach your later years.

I expect to have all these people in my life so I better be prepared. I won’t be surprised to find out in the future that my efforts to grow my Roth IRA would help pay for my child(ren). While we must not elude the fact that these people will pose a financial threat, they are also the source of love, joy, and happiness.

So, remain optimistic!

(Photo credit: Hey Paul)

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