Financial "Aid" After College: What Are a Parent's Responsibilities?
by , CFP®, President, Charles Schwab Foundation; Senior Vice President, Schwab Community Services, Charles Schwab & Co., Inc.
November 10, 2010
I’m a divorced mom with a 16 year old son who is starting to look at colleges. His father and I were pretty good about saving money for his college, but as I look ahead at my retirement, I doubt that I will be able to help him financially after that. Am I being too selfish to stop supporting him after college?
Your question goes right to heart of the parental dilemma—the desire to help and support our children while encouraging them to be self-sufficient—and also underscores the importance of your own financial planning. My short answer is an emphatic "no!" You're not being selfish. It sounds to me that you’re being prudent and realistic.
Here's my reasoning. I believe it's vitally important for every adult to ensure a secure, financially comfortable retirement for themselves. Social Security won't be sufficient for most people, and unless you have substantial savings or another means of support, you’re smart to save as much as possible. Doing so, by the way, is also good for your son. By preparing for retirement, you can avoid becoming a financial burden to him later in life. You don't want him to follow in the path of the so-called "sandwich generation"—adults struggling with financial responsibilities for their parents as well as their children.
Moreover, I think you should look at the post-college phase in your son's life as his first real opportunity to be independent. Of course you want to help him out, and you may remember from your own experience how challenging it can be when you're starting out. But you're already giving him one of the most valuable resources available: a college education. When he graduates, he'll still need your love and your support (emotional if not financial)—but that's a reasonable time for him to start being self-sufficient and financially independent.
Of course, you don't want to spring this news on him the day he graduates. Being honest and forthright now will help him prepare for the future. So I encourage you to talk to your son about your financial realities and what they mean for both of you. Explain the challenge of retirement and your need to plan for it (a discussion which can also have the extra benefit: of encouraging him to think about saving for his own future as early as possible). And explore what this might mean for him. If he knows he needs to go to work right after college, it might change what he studies or even his choice of college. Together, you might opt for a less expensive school if that could give both of you more flexibility after he gets his degree.
And finally, some practical advice in the event your son really does need some assistance after he finishes college (say, for example, for graduate school or if his first job after college takes him to an expensive city). Besides outright financial support, you could co-sign a loan for him (provided, of course that you’re prepared to step in if he can’t repay it on his own). Or he could always move back home temporarily until he's saved enough to go out on his own. More and more young adults do end up living at home after college these days, which can be a great interim solution, especially if you establish some guidelines and create a plan for his eventual independence.
For me, the mere fact that you question your motivation is evidence that you’re being sensitive to your son’s needs. I absolutely understand that you want to help him, but there are lots of ways to do so without providing substantial, on-going financial support—so that you can continue prepare for your retirement. Good luck to you both!
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