Business Report

How You Can Help Your Kids Financially

SHERRY FINKEL MURPHY, CFP, RICP, CHFC

As a parent of adult children, there’s an ongoing tug of war between your values, your finances, and your time, with respect to your family.

True story: Last week, my husband hopped into his truck, and drove three states west on zero notice, to provide grandpa coverage for 5-year-old grandchild number four, while our daughter and son-in-law juggled careers, pregnancy, selling a house, and relocating. Their careers are taking them where they need to go; and we are monitoring where they land to see how we can best provide support.

We are feeling blessed to have the time and geographic flexibility that so many of our peers don’t have. It was a great case study in offering resources “besides” money, that are meaningful value-adds to the kids.

As your financial planner, I will always recommend that you “secure your own oxygen mask” (fund your own retirement) before you turn to the seat next to you and assist. That part certainly has not changed. What might be different for this generation is the notion of what “helping the kids” looks like. While once you were determined to fund a wedding or provide a down payment on a home, today you might be more creative—or even return to the intergenerational assistance of days gone by.

Here are some ideas for helping your kids that can be as rewarding for you as for your adult children:

Combine an opportunity to see the grandkids with a destination family vacation and pay your own way. Take the grandkids in the evenings or at certain hours to give your children a break without increasing the cost of their travel childcare. I have clients who love to travel separately and converge on a destination with their children and grandkids.

The grandparents split the cost of the rental with the adult children, for which the kids are grateful. Everyone gets a little rest. The adult children get a few much-needed date nights, and the grandkids have quality grandparent time.

Start 529s for your grandkids’ education. The beauty of grandparent tax-preferred 529s is that they’re not necessarily visible on the financial need form. But they may come with a state tax benefit for you. The gift of education, no matter where it’s applied, is never wasted. Plus, courtesy of the SECURE Act 2.0, long-open 529 accounts that go unused may be able to fund a Roth IRA for the beneficiary, instead.

If the goal is for you to downsize, maybe pay for a mother-in-law suite or a tiny house in your adult children’s backyard. I know many people want to help their adult children purchase a house.

This worries me a little, because the house may be too much of a stretch for the adult children’s cash flow (and may result in the loss of flexibility

AARP Report: Two-Th irds Of Adults In U.S. Believe Consumer Fraud Is At A Crisis Level

Two-thirds of adults in the United States believe fraud has hit a crisis level, according to a new AARP Fraud Watch Network report.

The report also highlights the methods criminals use to steal money, such as cryptocurrency, gift cards and peer-to-peer payment apps. The findings suggest the need for Americans to share what they know about scams with their friends and family.

“Financial predators use a playbook to get us into a heightened emotional state,” said Kathy Stokes, AARP director of fraud prevention programs. “They know it’s hard to access our logical thinking when we are panicked, excited or scared. But knowing about specific scams makes it far less likely that we will engage with them.” for relocation.) I know that for you, the parent, the American Dream was home ownership. But it may not be the first thing your kids should invest in. How about a creative compromise?

Criminals often turn to atypical payment options in their scams like gift cards, peer-to-peer payment apps and cryptocurrency, because these forms of payment are processed quickly and cannot be reversed.

Peer-to-peer apps like Venmo, Zelle and CashApp are also used in scams. These apps do not offer consumers the same level of fraud protection as credit cards, but our research showed that 63 percent of adults are not aware of this distinction. These types of apps should be used as they are intended to provide payment to a known and trusted contact.

Fraud is a severely under reported crime, even as nearly nine in 10 adults feel people should report incidents, the report said. Nearly 40 percent of Americans still don’t understand that victims do not lose money to scams because they are gullible.

One client added funds to her daughter’s home-building budget to create a separate suite. Pre-pandemic, she summered in Europe, and everyone would visit her. Then she’d return home to her family for the winter, providing weekend babysitting coverage and an extra set of wheels for school and activity pick-ups.

Consider acquiring whole life insurance for your children and grandchildren, while they are young and insurable. Whole life insurance is a great utility player in a financial plan. It’s inexpensive to provide when young and the cash accumulation and/or long-term care rider can be critical to a retirement plan’s success. But your adult children, who have many competing obligations, may feel that it’s a bucket they can’t afford to fi ll until it’s too late and too expensive.

While you’re at it, acquire whole life insurance for yourselves and name your children as the beneficiaries.

Here’s what wealthy people know: They can spend or give away every dime of what they have, living later life to the fullest. It doesn’t matter if you have nothing left if you’ve already arranged for a tax-free transfer of wealth to the next generation via a life insurance death benefit.

Last, Ryan Frederick, author of “Right Place, Right Time,” is a longevity specialist who believes that geography—the right place to live—is critical to your health and wellbeing in retirement; and that living with or near family can be a multigenerational boon.

Be strategic about your own resources, your community, and your activity. Is ‘aging in place’ really the right solution for you? Does maintaining the family home worry your adult children? There’s a complementary body of research that indicates how important ‘grandparents’ are to the development of the youngest generation. Weekly wisdom and extra family time from Grandma and Grandpa (and help around the house) may be just what your adult children need, but something for which they would never think to ask. And there’s a great longevity benefit in it for you.

The AARP report showed one third of adults do not know it is a scam when someone directs you to use a cryptocurrency ATM to address some financial concern. In 2022 alone, the FBI says reported losses from fraud involving cryptocurrency reached $2.57 billion, a 183 percent increase from the previous year.

Gift cards also continue to be a common tool for criminals. About 25 percent of adults reported being unaware that being asked to make a payment or send money by gift card is a scam. A separate AARP report looking at the victim experience with gift card-related fraud emphasizes the emotional cost of these crimes in addition to the financial cost. Focus group participants felt there is little empathy for a crime that stole a reported $228 million from consumers in 2022 (FTC).

Of course, living near family requires setting boundaries and the rules of drop-ins. I am simply encouraging you to rule out nothing in your search for the perfect way to help your children, financially. As for me, I’m off to search for a small

Victimization from a scam can happen to anyone. Such language subtly blames the victim, underscoring the need for society to shift how we talk about victimization. Previous AARP research found that placing the blame for fraud on the criminal and not on the victim could lead to more reporting of these crimes and could ultimately lead to more law enforcement action to combat the fraud epidemic.

To read the full report visit Americans Are Aware of Fraud But Remain Vulnerable (aarp. org) pied-a-terre exactly 20 minutes away from my kids’ new hometown on Zillow.

The AARP Fraud Watch Network is a free resource that equips consumers with up-to-date knowledge to spot and avoid scams, and connects those targeted by scams with our fraud helpline specialists who provide support and guidance on what to do next. Anyone can call the helpline at 877-908-3360.

The Fraud Watch Network also offers free, facilitated peer discussion groups that seek to provide emotional support for those experiencing fraud; and advocates at the federal, state, and local levels to enact policy changes that protect consumers and enforce laws.

The primary purpose of permanent life insurance is to provide a death benefit. Using permanent life insurance accumulated value to supplement retirement income will reduce the death benefit and may affect other aspects of the policy.

Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company (NM) and its subsidiaries, including Northwestern Long Term Care Insurance Company (NLTC) in Milwaukee, WI.