Needy relatives can wreak havoc on your retirement

Mike Sante, Managing Editor

Three out of every five Americans 50 and over have given money to a family member sometime in the past five years.

Adult children. Elderly parents. Adorable grandkids. Struggling siblings. They all have needs.

But those demands can take a serious whack out of your retirement savings when you need it most.

That's why I asked Sharon Oberlander, a wealth management adviser with Merrill Lynch in Chicago, how she keeps family obligations from wreaking havoc on years of careful planning and savings.

In her view, it's become "a form of risk management."

Sharon Oberlander

Sharon Oberlander

Oberlander routinely asks her clients about the financial state of their relatives — something no financial manager would have dreamed of doing 20 years ago.

"We ask them about elderly parents and are they aware of how much money their parents have," she says. "We ask them about their kids and find out, are they gainfully employed? Is there any risk in their job? Do they have children? Do they have mortgages?"

When a family member needs help, you have to be realistic about how much you can afford to spend, rethink your retirement goals and revise your savings plan.

"I had a client who, all of a sudden, has to support in a nursing home her husband's elderly mother," Oberlander says. "They can't save what they were saving. So they are having to readjust their retirement plan. Her husband's probably going to have to work a little longer … because of this unexpected expense."

Does this sound like something that's happening in your life? Spend a few minutes listening to our entire conversation …

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