Today’s story in Time describes the pros and cons of providing significant financial gifts to your kids while you’re still alive. Many boomers find joy in helping children purchase their first home, investing in their grandchildren’s education or even treating them to a Disneyworld vacation.
However, there is a myriad of factors to consider before you starting writing those big checks. On the one hand, there’s a definite tax benefit of “gifting.” On the other, you might unintentionally create an expectation among the younger generation that proves unrealistic over time. There’s no guarantee that a gift intended to help pay a grandchild’s tuition won’t be squandered on other things, if you don’t talk about it.
As always, communication is key BEFORE cash is transferred “intra-family.” Discuss the matter openly with each other. Determine whether the gift is ear-marked for a single purpose or one that has no strings attached.
Your certified Fit-To-Retire coach is well-versed in these delicate family matters and can help you include cash transfers as part of your overall retirement plan.