Get the Freeloaders Offloaded with Bobbi Rebell, Ep #237

When people begin retirement planning they usually have 3 main questions. We cover the questions about what to do about healthcare before Medicare and should I pay off my house regularly on this show. However, the third question, what do I do if I still have kids at home, is not one we regularly address. That is why I’m excited to have Bobbi Rebell, author of the new book, Launching Financial Grown Ups on the show today.

Bobbi is here to discuss the growing phenomenon of adult kids living with their parents and how that can impact your retirement plan. You won’t want to miss this episode if your kids are not completely launched. Listen in to hear Bobbi’s fantastic advice for creating an exit strategy to get your children off the payroll.

Outline of This Episode

[1:22] What to do if we have kids at home when facing retirement?
[7:20] What can we do to prepare our kids for an exit strategy?
[10:53] How to deal with our children’s financial mistakes
[19:07] Don’t rob kids of the ability to think things through

Young people live at home much longer than in previous generations

Today’s young adults are living their lives much differently than in prior generations. They don’t have as much societal pressure to get married and have kids as soon as they can. This coupled with the fact that these young people don’t have to take on corporate jobs to get healthcare means that many young people are choosing to explore other modes of employment. Because of these major changes in lifestyle, many are choosing to live at home longer.

There are few benefits to young adults living at home longer. They are able to save money and they don’t have to rush into the first steady job they find. Another is that American society is enjoying stronger intergenerational relationships than ever before.

But this lifestyle change raises the question, what is the exit strategy? There are no longer any guardrails or universal expectations to get this generation out of the house. So what should you do when you are ready to retire yet your kids are still living at home?

What can we do to prepare kids for an exit strategy from a younger age?

Kids need to have a healthy understanding of finances so that they can be prepared to take on their own responsibilities. One way to help foster this is by being transparent about finances at an age-appropriate level.

Use your own comfort level with sharing your financial information to teach kids about lifestyle costs from a young age. Continue this conversation as they grow and put them in the driver’s seat when they are young adults. Bobbi uses a great example of how you can implement this strategy, so make sure to listen in to hear what you can do.

How to deal with our children’s financial mistakes

It is important to let kids make financial mistakes, but at the same time, parents should help them with the mistakes that could have serious long-term consequences.

Bobbi recommends having that when your kids get their first job sit with them and have them show you all of their HR choices first hand so that you can help guide them through health insurance and 401K choices. It is important to let them take charge; don’t do things for them. They need to have the tools to understand how to manage their financial life.

The most important thing that you can teach kids about financial management is risk and diversification. They need to learn what their own risk tolerance is firsthand, and if they have a diversified portfolio, the lessons shouldn’t be too painful.

If you still have in college or adult kids at home you won’t want to miss out on this interview with Bobbi Rebell to hear how you can get the kids off your payroll and get on with planning your retirement.