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[gekko]

When I worked in banking and in general conversation elsewhere, I have commonly heard people state the lack of any need to plan for retirement due to the fact they have children. I must admit I'm a bit shocked every time I hear someone say this, or a varient of it. First off, your child may be as big a loser as you are, if not more so. Second, there's no guarentee they would pay even if able. Third, why would you wish to saddle someone you supposedly care about with that burdon. 

I have always thought children who lived off of their parents (unless severe disability of some kind) for an indefinite period of time where parasites who are basically worthless to society as a whole and that the best thing their parent could do for them would be to deliver a quick boot to the posterior. A parent who thinks the same thing is almost worse in some ways but seemingly just as common. I'm infinitely glad to have neither.

[pedanterast]

I agree, but prepare to be flamed.  It's an accepted tenet in the financial planning profession that parents should not rely on their children's help in retirement.  It's also an accepted tenet in the financial planning profession that you 1) begin to save for retirement and then 2) begin to save for your (partial) contribution to your children's education, if and when more funds are available.

But, nobody does that.  Nobody throws out their lazy mid-20s non-contributing parasitic dysfunctional offspring, either. 

Maybe in the next life.

[deptstoremook]

I don't know, maybe they don't have the financial means to provide for their own retirement and are counting on their children?  It works this way in many other cultures, and not everyone is privileged enough to be financially solvent.

[clean]

The idea that your children "owe" you a retirement is a problem for me.  IF you are responsible for your children, then you OWE it to them to prepare for your own retirement so that your children do not have to divert wealth from their own retirement or their children's upbringing and education.

Another aspect of this is the ageing of the retired.  When Social Security was created, for instance, life expectancy was the same as social security eligibility.  So with retired people living longer, their children are now having to delay retirement themselves to support their parents.  How is that fair?  If it happens that is one thing, but to PLAN for that to happen is another matter altogether!

You can borrow (your children can borrow) for education, lending for retirement isnt available.  Further, they will now forgive student loans if the student's income is insufficient.

So flame me too, I guess.

[pedanterast]

How about this:

Upon procreating the two parents have an equal obligation to provide the offspring with three hots and a cot until age (18? 21?).  Since education is a public good, the community at large should provide schooling until age (18? 21?).  This should be funded by taxes (income taxes? sales taxes? property taxes?) and people who have X times as many children should pay (the same amount? X times as much? some coefficient of X amount?) as those who have no children, who certainly should not pay nothing if you accept that education is a public good.  So that is phase one.

Phase two is the parents reach age (62? 65? 70?) and then they can't work, or can't work as much as they used to be able to, or flat ass don't think they should have to work any more.  At this point the children

a) have no obligation to the parents
b) have an absolute obligation to the parents
c) have an obligation to the parents > than their obligation to their own children
d) have an obligation to the parents < than their obligation to their own children
e) have an obligation to the parents commensurate to the degree the parents helped them beyond three hots and a cot, which can be subjective

Or something else?  I vote "e."  Clean and I have enjoyed flaming each other for years but we know it's true that life expectancy is not 62 or 65 any more and some tough decisions have to be made. 

If nominated I will not run and if elected I will not serve BUT here is my platform:

1)  Immediately raise the retirement age to 70 for those who have not yet begun to contribute to Social Security.
2)  Do not tax Social Security regardless of income level since it's already been taxed.
3)  Apply the FICA tax to capital gains.

Whoever DOES run should consider

1)  Far more progressive income tax rates
2)  Changing the flat 1.45% Medicare tax rate to reflect and encourage wellness issues, including but not limited to:  smoking, drinking, doping, obesity, seat belt usage, etc. 

Regarding #2 above, we already do this when considering workers' compensation ratings.  Some jobs are more dangerous than others, and some lifestyles are more dangerous than others.  It's not a new concept.  Insurance underwriters do it all the time.

I have my fire extinguisher ready, and popcorn is available.

[wet_blanket]

I agree that in the society we have created it is at the least unwise to hope that one's children will take care of retirement.  But I'm not sure that organizing society in such a manner is a good thing.  I don't see us backing away from living as nuclear or sub-nuclear (I don't mean to imply inferiority, just that the unit of nuclear family is divided into two or more households) families anytime soon, however.  So while it would take a particular type of person to not help out their aging parents at all, there is a lot of room between "help out as one is able" and "take care of."

[barred_owl]

I agree with the spirit of Pedanterast's and Clean's posts--in the best of all possible worlds, I suppose.  My reaction to the OP is long, I'm afraid, so thanks to those who read through.

Let me offer this middle-ground, real-life scenario:  My mother lived to be 90 years old.  She and my father (who died at age 64, in 1988) were relatively poor, but extremely frugal.  They were typical for their times--hard-working, lower middle class, had savings accounts and a couple of insurance policies, but were not hot-shot investors or anything like that.  Somehow, they were able to find a way to fund my sister's and my undergraduate educations (albeit, in the late '70s) and provide 'start-up' funds on both of our first mortgages.  They allowed us to live at home until we were each in our early 20s, rent-free, despite the fact that we each either had jobs (sister) or assistantship funding/summer jobs (me).  Both parents were completely supportive of our pursuits of advanced degrees, but could not sustain financial support beyond the baccalaureate.

After my father died, my mother relied on Social Security income (she was 4 years older than my dad) and my dad's microscopically tiny pension from the US Post Office as her sole sources of income.  Luckily, by that time, the house was paid off and her only real expenses were for property taxes and basic needs like groceries, utilities, and the occasional repair bill; she carried no credit card debt or loans.  Still, SS income wasn't exactly bounteous, so it wasn't like she was flying out to Vegas for the weekend or driving a Cadillac or whatever.  No bonds, no stock dividends, just the very bare minimums in terms of income.

When it became clear that my mother could no longer live independently, at age 86, we faced the tough decision to place her in an assisted living facility (that did not accept Medicaid/Medicare) or a nursing home (most of which accept Medicaid/Medicare, but with compromises in terms of quality of care and existence--assisted living is preferable to nursing home accommodation because AL tends to be more home-like than hospital-like).  After selling mom's house and many of her possessions, we (my sister and I) were able to pay for ONE YEAR of assisted living support.  The remaining three years, at approximately $4000 PER MONTH were financed by a pitiful SS income and my sister, who--despite being a mediocre student has become a very highly paid executive--could afford to sustain those payments by contributing less to her own retirement fund.  If I could have contributed more financially, I would have, but I was simply not in a position to do so, thanks to job changes and a temporary period of unemployment--such is the life of an academic, eh?

In our family's case, my mother "planned" for her life after the federal government's stated retirement age by scrimping and saving, clipping coupons, and not living an extravagant (to her or anyone else) lifestyle.  That was still not enough, financially.  She never anticipated that my sister or I would have to care for her or pay for her accommodations later in life, and she never ever said that that's what we should do.  In fact, she was devastated when we told her that "her money" had run out and she had no money to buy Christmas presents for her great-grandchildren.  She died just a few weeks ago, penniless, but in the comfort of a facility that was satisfactory in terms of its capability of attending to her physical needs.

I guess what I'm getting at is that there needs to be systemic change, not just at the federal level, but at the corporate level, in terms of how longer lifespans can be simultaneously realized and financed.  Most of us do not pay $4000+ per month for rent or even mortgage payments...Why is it acceptable to expect that the elderly should be able (given this country's political past) to do so?!

Sorry for straying and for so long a post.  The original question, though, touched a nerve--a very raw nerve, given my mother's recent passing and the realities associated with it.

[clean]

She never anticipated that my sister or I would have to care for her or pay for her accommodations later in life, and she never ever said that that's what we should do.  In fact, she was devastated when we told her that "her money" had run out and she had no money to buy Christmas presents for her great-grandchildren. 

I am sorry for your loss.  Your mother did what she was supposed to do and was fortunate that she had you and your sister to help her.  It seems clear that she did not expect that you were obligated to support her. 

I reread the OPs message.  It is possible to read it as "because I have children, they owe me support while I am retired because I 'birthed em'." another way to interpret it is that "Because I gave all to my children, I dont have anything left". 

The first is just selfish and perhaps a reflection of the entitlement mentality of today's society.  The second is just poor planning.  Planning for your own retirement IS protecting your children from having to support you later. 

[barred_owl]

Thanks, Clean.  I think we both read the OP the same way.  

[parispundit]

I disagree with several parts of this.

1) In many times and cultures children HAVE been the ONLY form of old-age insurance available. It is not surprising that inter-generational solidarity still continues. Nor is it a bad thing. No one should be proud of needing to depend on their children in old age. No one should be ashamed of it either. Children do, except in unusual circumstances, owe a debt of gratitude and if necessary of cash to their parents. It is not unreasonable to think that they owe more of a debt to their parents than strangers, i.e., the rest of society, does. Yes, that means when providing means-tested aid to parents, you should means-test their kids, too.

2) Education is only in part a public good. It is also privately consumed, in both materially productive and non-productive ways. Tuition for some part of university costs is therefore justifiable - we can debate the appropriate percentage.

3) All double-taxation arguments, whether about capitals gains taxes (the conservative version) or taxing social security payments (the left-wing version), are silly. Once an income tax exists, ALL other taxation, of whatever form, sales tax, property tax, etc, is double taxation. First your income is taxed, and then it is taxed again when you buy chewing gum and pay sales tax. This applies even to people who pay no income taxes if they pay any payroll tax, e.g. social security etc. So there is double taxation. So what? The purpose of progressive taxation is you pay in accordance with the benefits you receive from society.

[merinoblue]

Not once in my life have I heard anyone express this sentiment, or anything close to it.  It's possible that because I don't have children, I'm not privvy to these kinds of conversations.  Nonetheless, I can't imagine anyone I know with children thinking this way.  What characteristics do people who express this sentiment share?  e.g. is this generation-specific?

[totoro]

In pre-industrial society the children would provide the retirement. When the parents were too old to work the children would work and feed them. If they owned land from the same land the parents had farmed and would pass on to them. So these ideas that the children wouldn't look after the parents when they are old or wouldn't inherit from the parents only can develop in a wealthy industrialised society. Groups who are closer to that previous reality may have different norms than those who have been more conditioned to "financial planning practice" might have.

[totoro]

3) All double-taxation arguments, whether about capitals gains taxes (the conservative version) or taxing social security payments (the left-wing version), are silly. Once an income tax exists, ALL other taxation, of whatever form, sales tax, property tax, etc, is double taxation. First your income is taxed, and then it is taxed again when you buy chewing gum and pay sales tax. This applies even to people who pay no income taxes if they pay any payroll tax, e.g. social security etc. So there is double taxation. So what? The purpose of progressive taxation is you pay in accordance with the benefits you receive from society.

Well then it is triple taxation on dividends and capital gains.... The double taxation argument makes a lot of sense to me... Here in Australia we get credits for corporation tax attached to dividends so that they aren't double taxed. Capital gains don't have those credits but long-term capital gains do have a lower rate as in most countries.

[lotsoquestions]

We live in a warm climate (where I did not grow up), and we have recently noticed a trend whereby elderly parents sell houses in the Northeast and move south as they age to live with children in the warm climate.  I have not been privy to everyone's finances as this occurs, but it seems to involve parents selling the house and cashing out, moving in with children -- in some cases paying rent or putting up funds for a larger house with an in-law suite, etc.  and sometimes providing some childcare.  

However, what we have seen a lot of is people our age (mid-40's) being 'sandwiched' -- in the sense that elderly parents tend to move in the moment kids move out to go to college.  In this case, it does appear that the people in their forties end up paying for kid's college without even the savings that they might realize from moving to a smaller house themselves, paying less on utilities and groceries without kids in the house, etc.  because they basically raise one set of dependents and then get a new set of dependents to replace the old ones -- who also tend to require transportation to activities, care at the end of a long working day, etc.  And clearly there's no childcare savings, since the youngest generation is already in college when the transition occurs.  And yes, in these cases, it appears that people who themselves might have retired and eased back once their kids graduate from college now cannot because they have a new set of dependents living in their house, requiring things like food, transporation and clean laundry.  

[quotiazelda]

My husband comes from a culture where children, especially the eldest son, are expected to care for their parents. I'm pretty much counting on having one or both of my in-laws move in with us at some point. I kinda hope it's just my MIL; my FIL is best in small doses.