August 23, 2012 § Leave a comment
I love surveys. They are just a wealth of awesome information. But one recent survey simply astounded me. I sit before you gobsmacked. Why? A survey by T. Rowe Price found that more people believe in ALIENS living ON OTHER PLANETS than believe that Social Security will continue to exist for their children’s retirement. Fine. In a battle between aliens and Social Security, aliens win.
What leaves me astounded is how we, as parents, are preparing our kids for that possibility. Because we aren’t really doing anything…
Imagine– a world without the safety net that is Social Security. If there is really NOTHING available for people’s retirement years, (which is not a scenario that I anticipate, but your guess about the future is just as valid as mine), then what would you need to do to prepare yourself or, more importantly, your children, for such a scenario? How much savings would your children need to set aside? What tools are you passing down or what savings strategies are you teaching to help them prepare?
After all, experts maintain that only four percent be withdrawn from any savings account to hope that account will last for all of your retirement. That would mean a savings account of $500,000 dollars would produce and annual $20,000 income. What steps are you taking, mom and dad, to help the kids grapple with the possible eventuality of being entirely responsible for their total retirement savings?
Teach them– The survey found that a parents’ advice to their children- believing there is not a safety net- is ‘to work hard’. And though I agree that hard work is good parental advice it is certainly not the most important advice I would give if I believed Social Security would not be available for my children.
Really, bub, you can’t only give that advice. The survey found that only 18% of respondents mentioned the advice of ‘start saving early for retirement.’ If you really don’t believe that Social Security will EXIST for your babies, teach them about savings, share your mistakes with them and teach them to save early for retirement.
Tell Them True Stories– Parents often hide bad things from kids thinking that’is a way to protect them. Not everyone agrees with that method of parenting. The ups and downs of real life can be a very good, and very memorable, teacher of truths to kids. Speaking of truth, when it comes to finances apparently- according to this survey- 75% of parents LIE to their kids about money, with 15% lying WEEKLY.
Your finances– Since many of us didn’t learn financial things from our parents, we are all learning deeper financial truths as we mature. I didn’t learn this stuff as a kid, either. That’s why I went to school to understand the ins and outs of money and investing.
But now don’t be shy about traversing this journey to financial fitness. As you get your finances under control you can also teach your children. You are probably not a winner of the Tour de France. Yet you taught your children the skill of riding a bike, right? You may not be a professional cleaner, or a race car driver, yet you teach them to wash clothes and taught them to drive a car. You can teach them something without being a perfect example of the skill.
So begin practicing what you believe and providing your darlings with the skills they’ll require if they will be, as some of you all believe, totally responsible for their entire retirement savings. Teach your children well, bub.
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