Financial Corner: Plan Ahead for Generational Generosity

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When you retire, can you afford to help your loved ones?

This issue is certainly on the minds of many retirees. Consider this: Seven in 10 retirees say they are willing to offer financial support to their families, even if it could jeopardize their own financial future, according to the Edward Jones/Age Wave Four Pillars of the New Retirement study. However, the same study found that 72% of retirees also say one of their biggest fears is “becoming a burden on their families.”

How can you reconcile wanting to be generous to your children and grandchildren with the fear of becoming a drain on these same family members? 

You’ll have to plan carefully. Ask yourself some key questions, including these: 

  • retirement 3585585 1920How much will I need in retirement? When you retire, some of your expenses, such as those associated with your career, will go down. And you might also downsize your living arrangements, resulting in lower costs. Other expenses, though, will go up. A healthy 65-year-old couple who retired in 2019 will need nearly $390,000 just to pay for health care, according to HealthView Services, which produces health-care cost projection software. Think about all your projected costs and try to create an annual budget for your retirement years.

  • What sources of income can I rely on? During your retirement years, you’ll likely have several streams of available income, including Social Security, your 401(k) and IRA, other investments and possibly even some earned income, if you choose to work part time. You’ll want to know about how much money you can count on from these sources each year.

  • How much can I afford to give away? Once you know about how much your expenses and income will be during your retirement years, you’ll have a clear idea of how much you can afford to give away to your grown children and grandchildren. Of course, this doesn’t mean you should contribute the entire difference between your expenses and income – you’ll always want to have a cushion. But at least you’ll know what your limits are. On a technical note, you can give up to $15,000 per person, per year, to as many people as you’d like without incurring gift taxes. And you don’t have to give just cash, either – you could contribute to a college funding vehicle, such as a 529 plan.

  • retirement 3585585 19201How can I protect my financial independence? Other than not spending or giving away more money than you’re taking in, you can certainly take other steps to keep your financial independence and avoid becoming a burden to your family members. For one thing, you can protect yourself from the heavy costs of long-term care, such as an extended nursing home stay. A financial professional can help you choose an appropriate protection strategy. Also, you can guard your interests, and those of your family, by creating a power of attorney, health care directive and other appropriate legal arrangements (with the help of an attorney).

Your best impulses – to be generous to your loved ones while staying financially stable enough to avoid becoming a burden to them – don’t have to be mutually exclusive. With careful planning, you can help make both goals a reality.

Review John-Paul’s Financial Corner Articles:

“If anyone has any questions please reach out and use me as a resource. If anyone in this community wants to pick my brain or has concerns about what’s going on in the market, I’d would be happy to make myself available.”

Bio of Local Resident John-Paul:

John PaulHi, my name is John-Paul Tancona and I’m a financial advisor with Edward Jones. I have over 19 years of experience in this industry, working with both institutional and retail investors.

John PaulI earned my bachelor’s degree at Villanova University in 2000 and immediately started my years journey into the world of finance. My first 13 years were spent working at high profile wealth management firms covering large institutional investors. Recently, I joined Edward Jones and changed my focus to educating and empowering individual investors so they can achieve all of their financial goals.

We believe in working with investors one on one, either at your local Edward Jones office or conveniently at your kitchen table. We want to find out what is most important to you and your family so we can take you through our established process and partner together for life.

Whether you’re planning for retirement, saving for your children or grandchildren’s college education or just trying to protect the financial future of the ones you care for the most, we can work together to develop personalized solutions tailored specifically to help you achieve your goals.

I live in Sparta with my wife, Julieann, and two children: Dominic (10) and Daniel (7).

My branch office administrator, Ellen Hawkins, has 35 years of experience and is dedicated to offering you an ideal client experience.

I look forward to answering your financial questions and concerns. Please contact me to discuss your options so you can make informed decisions about your unique financial situation.   


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