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Retiring With Kids Still at Home?

Having children later in life brings a whole new set of equations

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a game night involving paper money, and a number spinner, bright rainbow colors
Sarah Anne Ward/The Licensing Project
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When I met my husband, Mark, in 2005, I ran equations. I was 31, he was 43: a Gen X/boomer romance. When I was 38, he'd be 50. 53/65. 68/80. Twelve years felt like an enormous gap when we met. By the time we married a year later, it wasn't such a big deal.

When we started having kids (35/47), I joked with friends that we were on a fast track to babies because we were old. When our third and youngest was born (39/51), I noted that when he graduated from high school, Mark would be 70. Often, if someone saw Mark alone, wrangling three kids in a restaurant or store or on a ski trail, they would congratulate him: “Good job, grandpa!” The fact that he was prematurely gray didn't help matters. He started answering, “I'm the great-grandpa!”

These days, our kids are 9, 7, 5; we are 45/57. Mark doesn't get the grandpa cheers anymore — probably because he's so clearly Daddy. But lately, some new equations have entered our pillow talk. This sequence in particular: 67/55/20/18/16.

If Mark wants to retire around 67, we're going to have one kid in college (probably), one kid about to go to college and one kid still living at home. The avalanche of late-midlife financial questions has started pouring down. Retirement? Kids’ education? Later life health care costs? Mortgage? And and and?

Having kids later in life definitely has had its advantages — we're wiser, we've done a whole lot of stuff in our youth — but on the flip side, time and energy are running out. How do we manage all that still has to be managed and do right by our kids’ future, and right by our own financial and physical well-being?

Here are four key areas to consider.

1. Retirement vs. college

Two epic investments loom over our heads: retirement and our kids’ education.

Amber Miller, senior financial planner at the Planning Center in Minneapolis, points out that, contrary to the popular misconception, expenses don't go down in retirement; they just change. And you can't take out a loan for retirement. “There are loans for mortgages, loans for college, but if we're not focusing first for retirement, we'll never get there,” she says. The retirement/college conundrum is always going to be complex, since the future cost of education is full of unknowns. More often, Miller sees clients who ask their kids to foot some of the bill: “The older idea is that parents just pay for college, but now parents are teaching their kids to have some skin in the game."

This is the philosophy of Kari Brych (49) and her husband, Jim (54), who have two kids, ages 8 and 6. They started saving for their kids’ college education in the first year following adoption, but they aren't overly concerned about paying for college. They both paid for their own education (they work in health care), and while they'll help their kids with the costs, “I'm not sure we'll foot the complete bill,” Brych says. “We want them to have some sense of ownership and work ethic instead of entitlement, and to find that balance.” They've prioritized funding their retirement, which they'll accomplish by having worked more hours before having kids, and living within their means.

Our own financial adviser told us the same thing: There's a deadline to save for retirement, and it's coming. Best to save as much as we can now.

2. Invite everybody to the discussion

For some, money is intensely private, a matter not to be discussed with anyone. But because money is emotional and personal, Miller says, talking about it with our kids can be a great opportunity to teach about what is valuable to us as people and as a family. Sharing with them what choices we're making and why — in age-appropriate ways — can mentor fiscal responsibility. She works with clients who invite their minor-aged children to some financial conversations. “The more we can have cross-generational conversations, the more satisfying results we'll have,” she says. And another bonus: She's seen 16-year-old kids who just started their first IRA to go with their first job.

3. Health insurance costs

There's health insurance to consider — for us and for our kids. The 50s are the prime decade to purchase long-term care insurance; before that age, we're paying premiums for too long, and after the 50s, it gets prohibitively expensive to buy. This is another conversation to add to the pillow talk: Do we have the resources to pay for growing health care costs? “Not like this is a solution for everyone,” Miller says, but it's a question to consider.

Health insurance can also play a role in how long we continue to work, especially if we have kids to cover. “We see ourselves working past retirement in some capacity,” says Brych, “if only for health care insurance.” Because she and her husband both work in the medical field, they can work reduced hours and still get benefits. “If that continues, one of us will consider doing it, since we'll have young kids and we'll want to have it.”

4. Taking care of ourselves — now

And then there's the present moment to consider.

Five years ago as I sat on the couch nursing an infant, with a 4-year-old and a 2-year-old racing around us, I could literally feel my muscle mass disappearing. I was 40, and I knew I'd have to start strength training along with the running and other cardio I had been doing since my 20s. Mark and I want to be able to keep up with our kids, and their energy level inspires us to stay on our game.

“One of our big concerns is staying healthy,” says Brych. “For both of us, maintaining a healthy lifestyle is paramount. Some things we can't change, like genetics. But some things we can mitigate so we age in a healthy fashion.” They stay active by biking, skiing and hiking, individually and together as a family. “I owe it to my children to do that,” she says. “They didn't choose to be adopted by old parents."

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