Dream of spending your retirement with grandkids? This episode of “Retirement Readiness” tackles how to balance that joy with smart financial planning. Tune in to:
- Learn how to invest strategically for their future with different tax-advantaged accounts, from 529s to custodial accounts.
- Discover why clear communication with your spouse, kids, and grandkids is key.
- Explore the importance of keeping your overall vision for your Two Comma life in focus while planning for the future.
- Consider how you can best support your loved ones, even if the outcome isn’t always necessarily “equal.”
“If you take a minute and kind of step back and think about grandparenting and retirement intentionally, what do we want this relationship to look like? What do we want that lifestyle to look like?” host Tim Regan says. “I think you can get to a really happy place and kind of check all the boxes.”
Listen to the full episode to learn more about retirement and grandparenting, or click here to explore our library of “Retirement Readiness” episodes.
On this episode of the “Retirement Readiness” podcast, hosts Tim Regan and Katie Umland discuss how retirement and grandparenting intersect – including how to invest for your grandchildren’s future, the importance of being intentional with your time and money, and more.
For many of us, our dream retirement involves more than just grand adventures or more time for our hobbies, it also involves spending time with family members (especially the newest little ones joining your clan).
As you create a financial plan to support your Two Comma life and care for your loved ones, Tim and Katie often recommend you stay away from the “equal is always best” mindset. Instead, they suggest you focus on the importance of tailoring your approach to each of your child’s or grandchild’s needs. For example, some may need help with college funding, while others might need additional resources for healthcare needs. The key is to focus on the desired outcome, like a secure start in life, rather than just equal sums of money.
To get started, you can discuss how you wish to contribute to your grandchildrens’ upbringing, both financially and in regards to time you wish to spend with them.
“If you take a minute and kind of step back and think about grandparenting and retirement intentionally, what do we want this relationship to look like? What do we want that lifestyle to look like?” Tim says. “I think you can get to a really happy place and kind of check all the boxes.”
Next, you can consider which financial planning tools are available to help you make the most of the funds you decide to give your grandchildren.
While a 529 account offers tax advantages for educational expenses, Tim notes that custodial accounts also offer a great starting point for that conversation. Custodial accounts can offer more flexibility than 529s.
“The custodial account, for the most part, is going to be tax-free, and the kids can use it for whatever they want,” he explains. “In that custodial account, the grandparent still stays the custodian, which means they control the money until the child turns 21.”
Whichever route you choose, the overarching vision of how you wish to spend your time as both a retiree and a grandparent should guide your decision-making.
Hit “play” to hear more about how retirement planning can support your role as a grandparent, and be sure to check out our other “Retirement Readiness” episodes.
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Key Timestamps and Topics
- 00:06:49 – Discussion about the importance of being intentional in retirement and with grandkids.
- 00:07:06 – Why it’s important to tailor how you help your grandkids to their specific needs.
- 00:11:00 – Explanation of 529 plans and the benefits of custodial accounts for saving for grandchildren.
- 00:12:34 – How the new Roth IRA conversion rule allows you more options for your 529 savings.
- 00:16:22 – Emphasis on designing your life and being intentional with time and money in retirement.
- 00:20:16 – Discussion about the challenges of grandparenting full-time and the shift in roles you may experience.
- 00:26:56 – The hosts conclude with our latest Mailbag segment.
3 Key Takeaways
- Focus on the desired outcome you want for each grandchild, like helping them get a secure start in life, and adjust your approach based on their specific situation rather than committing to an “equal is best” mindset.
- It’s best to discuss how involved you wish to be in your grandchildren’s lives – both financially and otherwise – with your spouse.
- You can use certain tax-advantaged savings vehicles, like a 529 or custodial account, to optimize the funds you give your grandkids.
Links
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