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Your Child Is Not A Good Retirement Plan

Tunde Odediran writes on why parents should look beyond their children for a comfortable post retirement life.

How ready are you for retirement?
How ready are you for retirement?

Many parents stake everything on their children with the naive expectation that the child will provide financial help in later years.

Making the offspring a retirement plan is bad planning and the reason why many people in my generation will literally die broke.

Children are an expensive investment in time, emotion and money.

The actual financial cost of raising a child into adulthood is difficult to quantify and has rarely been a focus of economists in Nigeria.

In the United States, the average estimated cost is $20,000 per year before university or age 18. If university education is factored in, it could go above $50,000 per year until graduation.

For most parents everywhere, this expense does not end with university graduation, as many young adults are supported even in adulthood when graduates continue to live and feed off parents until they move out of the house to start a family.

Again, if you think marriage is where support stops, you are wrong.

By the time the average family is done with this task of raising children, there is little left as savings to enjoy retirement. As such, many parents just resign to the fate that their children will become the meal ticket in old age

Support could go on after marriage, because some parents continue to fund their adult children in the form of gifts, rent assistance and investment donations. They keep spending until their new adult becomes financially stable and independent.

In a nutshell, the cost of bringing up a life is by far the most significant investment in the life of an average parent and it could go on past the age of 30.

It is more expensive than any other investment or retirement plans.

By the time the average family is done with this task of raising children, there is little left as savings to enjoy retirement. As such, many parents just resign to the fate that their children will become the meal ticket in old age.

In the Nigerian culture, children have always been the social security provider for the aged. People sow everything into their kids with the certain expectation that, in return, their adult children will remember to give back.

Even parents who fail to raise their children see it as a right to be fed by their children. Culturally and socially, a stigma exists for whoever fails to take care of his or her parents. The society frowns upon it.

But the day nears when it will no longer be shameful for young people to live their dreams without thinking about the financial needs of their parents.

Some parents may already have begun to feel the cold breeze of this individualistic new world as cultures are no longer that separated by rigid boundaries.

Millennials and Post-Millennials are doing what their peers do in other parts of the world do, which is to take care of themselves as a priority, sending only birthday gifts and WhatsApp messages in reward to parents.

While many Nigerian parents expect more than birthday cards, today’s young adults will demand that their parents fend for themselves.

The question will someday become for the parent, why did you not anticipate and prepare for your retirement; rather than why did your children abandon you?

That is why it is important to put something aside for oneself even with the high cost of raising children successfully.

The day nears when it will no longer be shameful for young people to live their dreams without thinking about the financial needs of their parents

Only the rich really do enjoy retirement in this country.

By the time most people retire, all they can hope for is their gratuity and pension, which lately have become less dependable as a source of steady retirement income.

Outside of the employer plan, most parents have nothing saved by the time the kids stand on their own.

The average European or American retiree derives most retirement benefits from long-term investments and other forms of financial planning, from which good living is guaranteed.

Savings allow them to travel the world, buy new homes and find new interests in the twilight of life. Such retirees are not just the affluent, but include your average Joe – teachers, nurses, civil servants, electricians and similar others.

A former colleague, who has retired for a few years, comes by sometimes to share his experience. He maps travels to exotic attractions around the globe all year round.

Another colleague, who retired just three months ago in the UK, is spending six months in Thailand, Indonesia and Malaysia, exploring photography, food and new cultures. They planned for it – saving from the time they started work.

In addition, developed nations have various forms of national social security programmes, supported by other benefits for senior citizens, such as low-pay housing, low-cost transport fares, purchase discounts and free medical care.

Most retirees cannot feed, talk less take vacations. They hardly can afford local vacations, talk less travel abroad. Their kids have drained them. They quietly watch life as pass by. It is a tragic way to spend the golden years. Things have got to change

Since government-run cushions for retirees is lacking at home, it is even far more important that people start taking retirement investments more seriously. Most retirees cannot feed, talk less take vacations.

They hardly can afford local vacations, talk less travel abroad. Their kids have drained them. They quietly watch life as pass by. It is a tragic way to spend the golden years. Things have got to change.

From the day we start work and family, savings for retirement should begin.

Parental responsibility is sacred, but equally important is living the golden years with the joy that comes with financial freedom.

It is bad planning to put retirement savings in the backburner in order to help the kids succeed – both should be progressed simultaneously.

Many have sacrificed their entire productive years to ensure their children succeed.

It is a good thing, but the problem is that because they have put everything on the line, they end up being totally dependent on those who will have their own challenges.

Among other things that could go wrong, the offspring’s spouse can resist being generous to the parent out of ignorance of the parents’ investment, resulting financial conditions or simply a lack of sympathy.

Under such a circumstance, the parent will either have to disrupt the peace in the new home or live in poverty. Besides, a young adult can run into career and financial difficulties, shutting down the ability to take care of parents properly.

Retirement should be a time to open new, unexplored chapters of life. Those who have fun in retirement are known to live longer. It is a time to start new and exciting things, instead of becoming the grumpy grandfather or grandmother who demands for too much money

In such a case, the parent becomes a burden. Such parents are not just a burden, they lose their own freedom of choice, become unhappy and end up dying sooner.

Retirement should be a time to open new, unexplored chapters of life. Those who have fun in retirement are known to live longer.

It is a time to start new and exciting things, instead of becoming the grumpy grandfather or grandmother who demands for too much money.

In retirement, you can go on tourism, visit families you have not seen for decades, see the wonders of the world, take up a new sport or hobby, start a vocation or volunteer in the community.

It is possible to even start a new business in retirement, supposing you have saved enough. It could be something to look forward to if planned.

But retirement investing needs careful planning.

Hard decisions must be made. It is important to set limits for the child, especially at the point of adolescence.

Expenses can be cut down by finding summer jobs for the child after secondary school, and demanding an austere lifestyle in college.

A parent who stashes enough away for retirement is not selfish or mean. The child would be thankful for a parent that is self-sufficient and can perfectly take care of personal needs

It is wrong to choose a university that you cannot afford. If public university is what the family can pay for, that is where the child should go.

It is important to engage in open discussions so that the child knows the one’s financial limits. A good approach is to reach compromises in order protect retirement savings.

If the child starts working, ensure he or she saves a particular amount, helps with the bills and agree a schedule of the child’s Independence Day, by which to move out of the house.

Those who live in Western countries already know their children are not going to give them much, so it is normal for the student to pay a part of the university tuition in loans.

And after graduation, the young adult knows it is time to move on instead of hanging around like a slacker.

Remember – once you are retired, your income becomes fixed and lean. You no longer have easy access to loans; and if you do, you find it difficult to pay back.

A parent who stashes enough away for retirement is not selfish or mean.

The child would be thankful for a parent that is self-sufficient and can perfectly take care of personal needs.

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