Supporting Loved Ones Without Derailing Your Retirement, Ep # 254

Many of us have financial goals that extend beyond ourselves to include friends and family. Doing so can be an enormous help to those you love, but it is important to consider your own financial well-being in conjunction with that of the ones you want to help. Today, we’ll look at an article that explores how to intentionally offer financial support to your loved ones without deviating from your financial goals.

The article that we’ll look at comes from Sophia Bera at GenYPlanning.com and it takes a different approach to a timeless topic. Approaching issues from a different angle can give you a new perspective.

In the listener questions segment, we’ll discuss two questions: one about inverse ETFs and another about the specific mechanics of doing a Roth conversion.

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Outline of This Episode

[3:12] Money is a team sport
[10:54] Create healthy boundaries
[13:24] My thoughts on inverse ETFs in a declining market
[16:54] Should Dave rebalance first before making a Roth conversion?

Creating drama-free financial help

Mixing familial relationships with money can be a minefield, but it doesn’t have to be. Before offering financial support to your loved ones, make sure that doing so doesn’t cause you to deviate from your own course. When you are sure of your financial future it can give you the confidence to help others without stress. Helping those you care about is an act of love that doesn’t have to be filled with tension or drama. To reduce stress, ask yourself some questions before rushing in to lend a hand.

Are you in a position to help financially? Check your financial plan before offering to help.
Would giving money hinder your progress toward other financial goals?
Does financially supporting your loved ones coincide with your long-term goals?
Have you always wanted to help your loved ones financially, or is this decision spurred by a pressing need?
Consider how you can offer financial assistance in the most beneficial way.

Mixing familial relationships with money can be a minefield, but it doesn’t have to be. Click To Tweet

Understand the need before offering support

Before jumping in to solve problems with a check, first consider your loved one’s needs so that you can offer the best form of support. You may find that their needs are different than you thought. There may be other ways that you can help.

Consider the financial expectations of the ask. Is this a form of long-term financial support or a one-time thing? How would your resources stretch the furthest? Should you help them pay off a debt or offer them a place to live? Think if there are other ways you could meet their needs without impacting your financial situation.

Before jumping in to solve problems with a check, first consider your loved one’s needs so that you can offer the best form of support. Click To Tweet

How to help

One way to make sure that you can help is by setting up a family brokerage account that you keep in your own name. This separate account that is set up for a specific purpose can ensure that you aren’t taking funds from other goals. That way you’ll know when and how much you can afford to give. This creates natural boundaries and ensures that you aren’t jeopardizing your own financial goals and needs.

Listen in to hear the annual gift tax rules. Don’t forget to share your opinions with us. Make your voice heard by completing our annual listener survey!