Want to help your adult kids and grandkids? Give them money while you’re still alive.
How to manage “giving while living” without endangering your own retirement.
As people live longer and retirement savings are put to the test, many are considering an unconventional strategy: giving money to adult children and grandchildren while still alive. This approach, often referred to as "giving while living," can be beneficial for both parties, but it's crucial to manage it wisely to avoid jeopardizing one's own financial security.
The idea of giving while living has gained traction as an alternative to leaving large inheritances. By transferring wealth during one's lifetime, individuals can see the impact of their generosity firsthand and potentially reduce tax liabilities. However, it's essential to strike a balance between supporting loved ones and ensuring a comfortable retirement. A key consideration is the potential impact on one's own cash flow and savings, which could be affected by large or regular transfers.
To make giving while living work, it's vital to assess one's financial situation, create a sustainable plan, and communicate openly with family members. Experts recommend considering factors such as retirement goals, expenses, and income streams before making transfers. What's crucial to watch next is how this trend evolves and whether financial institutions and advisors will develop more products and strategies to support individuals who want to give while living without compromising their own financial stability.
Originally reported by marketwatch.com. CurrencyNews adds analysis for finance & markets readers.