Needy relatives can wreak havoc on your retirement

Mike Sante, Interest.com 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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  • Hal Slusher

    I never begged for money I earned it. Now family members think you still owe them. A bunch of them are trying to move back in with us and bleed us dry. The wife and I are living in senior park that doesn't allow them to live here this was done intentionally so we wouldn't have a moment of weakness and let the vultures live with us.

    • Rod

      Right on Hal.....cut the snake off at its head...that is the way to solve potential disasters in the making.

  • Elizabeth Meyer

    I'll probably be working for the rest of my life. Even before my mother had to go into assisted living, I had my autistic daughter to worry about. Fortunately, my mom had two year's worth of assets, so I had to run that down and get her on Medicaid. Then my daughter turned 18, so I had to get her on SSI along with setting up Wills, a Trust, and Guardianship. I have a little nest egg, but my husband and I will not have the luxury of going into assisted living or a nursing home because our money has to go to my daughter's care.

  • Lorraine Smith

    Unless it is your parent or a dependent child, then I would NOT lend money to a sibling. I am the youngest of 10, I feel as if I worked hard to get what I have, they did not. So therefore, they made their bed, so lie in it and take the consequences of their disasterous lifestyles. so why should I sacrifice retiring comfortably?

  • Rod

    you get put in a financial hole...only if so choose. We all need a hand up once in awhile...how much and how often is another story.

    • 32 Ford coupe

      Big difference between a hand-up & a hand-out.

  • Tom

    I will retire in 3 years at 66, I have 4 siblings who don't have a dime between them. I have always had a policy to not loan money to relatives, if you loan them money than they don't want to talk to you because they owe you,,, So if they ask, I just give them $300 and say dont pay it back to me,, its yours. But dont ask for more - ever
    And we are all buddies!!

  • Governmentsuxs

    After all how much of someone elses earned do they owe you?

  • me

    your parents deserve care and if you are too selfish to help them or relay on a stupid cuntsulant than maybe you will get what you give when you need it. LOL

    • Hal Slusher

      Doing that only drains your resources. Once their money runs out then the government remember the ones who suck our wallets dry to the tune of 50% promised that for taking our money they would take care of all of us cradle to grave.