360° Coverage : Northwestern MutualVoice: Raising Children Late In Life Requires...

2 Updates
Northwestern MutualVoice: Raising Children Late In Life Requires Careful Planning
Photo Credit: Forbes Business

Northwestern MutualVoice: Raising Children Late In Life Requires Careful Planning

Apr 3 2014, 8:28am CDT | by

As Americans are leading longer and healthier lives, there’s an increasing number of people filling their empty nests as either first-time, late-in-life parents or as parents raising another round...

Filed under: news

 
 
 

24 weeks ago

Northwestern MutualVoice: Raising Children Late In Life Requires Careful Planning

Apr 3 2014, 8:28am CDT | by

As Americans are leading longer and healthier lives, there’s an increasing number of people filling their empty nests as either first-time, late-in-life parents or as parents raising another round of children. With that comes a new set of financial concerns to be aware of.

Government records over the last 10 years have shown small but steady increases in the number of women giving birth in their mid to late 40s—due in large part to the advances in fertility treatments. Adoption agencies across the country say they see even older parents—those in their 50s and 60s and some already in retirement—opening up their homes and expanding their families through private adoption and foster care. They point out that some of these older parents may be more stable in their careers or financially strong and can bring a level of wisdom and patience to childrearing. They even find them willing to adopt older children and those with special needs.

Chuck Johnson, president of the advocacy group National Council for Adoption, says age barriers have by and large been pushed aside in lieu of creating strong families for kids. “Over the last 20 years you’ve seen a shift. Older parents are adopting more, and they are adopting older children, which is something we see as a good trend in providing families for the children most in need.”

Some late-in-lifers come to parenting via grandparenting, when their older children have found they cannot care for their children. Regardless of how older parents come into parenting, they all share similar concerns about making a stable life for their children while they negotiate a host of life changes that come with age. These overlapping concerns require careful thought and planning, says Northwestern Mutual’s Director of Advanced Planning Amy Kiiskila. “The goals of saving for retirement and paying for college might be the same as with younger parents, but the strategies put in place to achieve them are different.”

Build Your Team
/>
These competing financial and life demands require careful thought and planning, and like most things, it’s helpful to have a team on your side. In this case, you’ll want to involve your financial advisor as well as an estate planning attorney. Your advisor can help you identify the best financial options to meet your needs and help you plan for your retirement. An estate planning attorney will put in place a clear system for how your child will be cared for in the event that something happens to you.

Make a Financial Plan
/>
As any parent can tell you, raising a child takes dedication and patience. They’ll also tell you it takes a lot of money. Amy Kiiskila points out that older parents are likely to see their own retirement and health concerns intersect with the financial realities of raising a child and saving for college. “There’s likely to be more strain on your dollars, and you’ll want to be more deliberate in how you allocate your money to meet these needs.”

Putting in place a realistic and flexible financial plan is essential. Planning for your child’s care and college education will be a priority, but so is planning for your month-to-month expenses and your long-term financial needs. If you’ve adopted or had a child who has special needs that require additional care, you’ll need to factor in those costs for the long haul, and you’ll need to look into expanding your safety net to provide your child with health insurance.

If you are already retired, you’ll need to sit down and reassess your financial situation and your goals with your advisor. You may decide to make some changes to how you are drawing from certain accounts, or you may want to consider auxiliary mechanisms, including differing insurance options like whole life insurance and others like income annuities, which might provide stability and flexibility when you need it. Each has its own plusses and minuses that a professional can advise on.

If you haven’t yet retired but foresee doing so while your child is still a minor or while he or she is in college, Kiiskila says you need to be doubly focused on your retirement strategy. “The instinct will be to put a lot of money into college savings, but some of that might have unforeseen implications for student financial aid, and there are different ways to fund education.” Many financial aid programs look at the assets of the family in determining whom to help. Most education savings mechanisms like 529 plans are factored into those calculations, while some retirement accounts may not be.

Laying out all your goals and estimating your expenses will help you determine, along with your advisor, the best combination of savings, insurance and investment strategies to suit your family’s needs.

Provide the Legal Backbone
/>
There are several legal documents you’ll want to put in place as soon as possible with the help of your estate planning attorney and consultation with your financial advisor.

First, you’ll need a will. This document is the road map that lays out the steps you want taken to care for your child and your assets after your death. With your will, you name your beneficiaries. You will also need to designate a guardian for your child. If your child is a minor, the will should state how the assets should be managed for the benefit of your child until you feel that the child is old enough to handle the assets. For example, your will might provide that the assets are held in a trust for the benefit of your child until a specified age. You might name the same person to raise your child and manage the child’s finances, or you may decide that you want more than one person to fulfill different roles. Some people may be more suited to supporting your children’s emotional and familial needs, and another may be better overseeing financial matters.

Whether you have one or many inheritors, it is important that you clearly detail any allocations you want made; and if you have specific desires for how the money will be used and distributed for your child’s care, it should be fully detailed in the will. You may also want to consider establishing a trust for your assets, depending on your financial and tax situation.

You’ll also want to put in a place powers of attorney that can be used if you are unable to act as your own agent due to illness or incapacity, including:

1. Durable Power of Attorney. This grants a person you choose to act on your behalf in case of an accident or illness, allowing him or her to make decisions about your finances, sign checks, prepare taxes and manage your assets.

2. Power of Attorney for Health Care and/or a Living Will. These powers allow you to make known in advance of any incapacity what you want done regarding your own health care. A Power of Attorney for Health Care allows you to designate someone to speak on your behalf about what health care you should receive. A Living Will is a document that will direct a doctor exactly as you wish.

Think Long Term
While older parents may be valued for their wisdom in parenting, the realities of health and aging are a concern that should be planned for. “Long-term care planning takes on a greater importance,” says Kiiskila. “When an event happens, your kids are going to be younger and may not be in a position financially or emotionally to take care of mom and dad.” Putting in place steps to take care of you during a long-term illness or disability is an essential part of the plan for an older parent. Ask your advisor for strategies to help your child or his or her guardian arrange for your care./>/>/>

Filling that empty nest will feel all the better once you have a strong plan in place to help ensure a solid future for your new family.

The Northwestern MutualVoice Team is a group of professionals who share insights and opinions from experts and industry leaders across the enterprise. Our vision is to inspire others to take action and plan for their financial future through topics ranging from financial planning, retirement planning and distribution strategies, wealth accumulation and preservation, to leadership, philanthropy and innovation. 

 
Update
2

3 weeks ago

Khazanah throws MAS RM6b lifeline

Aug 29 2014 5:01pm CDT | Source: Business Times Singapore

August 30, 2014 1:15 AMKHAZANAH Nasional will inject RM6 billion (SS$2.4 billion) over three years to resuscitate loss-making Malaysia Airlines (MAS) under a recovery plan that includes even an Act of Parliament. Other key moves are migrating its operations, assets and liabilities to a new ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 
Update
1

3 weeks ago

MAS posts loss of RM307m for Q2

Aug 28 2014 5:00pm CDT | Source: Business Times Singapore

August 29, 2014 1:13 AMMALAYSIA Airlines (MAS) registered a loss of RM307 million (S$122 million) for the second quarter to end-June, but warned of worse to come in the second half when the "full financial impact of the double tra ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Medvedev slams EU sanctions against Russian banks
Moscow, Sep 20 (IANS) Russian Prime Minister Dmitry Medvedev Saturday criticised the European Union (EU) over its ban on Russian banks, warning that the 28-member bloc will pay the price.
 
 
Communicable diseases warning issued after floods in Philippines
Manila, Sep 20 (IANS) The Philippines Department of Health (DOH) Saturday warned the public of the transmission of communicable diseases following the floods that inundated Manila and surrounding provinces.
 
 
Pakistan facing over 6,000 MW power shortfall
Islamabad, Sep 20 (IANS) Pakistan is facing an electricity shortfall of over 6,000 MW, with many parts of Punjab province witnessing outages of 20 hours a day.
 
 
'Most British female students face sexual advances on campus'
London, Sep 20 (IANS) Over one-third of British female university students have faced unwanted sexual advances on campus while studying, reveals a new poll.
 
 
 

Latest from the Network

John Cusack: Young fame is hard
John Cusack thinks being a child star is ''brutal''. The 'High Fidelity' actor - who appeared in his first film 'Class' aged 16 - believes finding fame at a young age can be a ''damaging'' experience and feels he's had...
Read more on Movie Balla
 
Indian lifters fail to impress at Asiad
Incheon, Sep 20 (IANS) Indian weightlifters began their Asian Games campaign on a disappointing note as all three participating contestants finished at the bottom half of the table in their respective categories in...
Read more on Sport Balla
 
Released Turkish hostages join families in Ankara
Ankara, Sep 20 (IANS) Forty six Turkish hostages released by the Islamic State (IS) militant group returned to the Turkish capital of Ankara by the special plane of Turkish Prime Minister Ahmet Davutoglu and were...
Read more on Politics Balla
 
Indian women shuttlers in semis, men out (Roundup)
Incheon, Sep 20 (IANS) The Indian women's badminton team lived up to its potential to reach the semi-final at the Asian Games at the Gyeyang Gymnasium here Saturday. The shuttlers first beat Macau 3-0 in the Round of...
Read more on Sport Balla
 
Indian medallists at Asian Games
Incheon, Sep 20 (IANS) The following were the medallists for India on the first day of competition at the 17th Asian Games here Saturday: Gold: Jitu Rai: Men's 50 metre pistol shooting Bronze: Shweta Chaudhary: Women'...
Read more on Sport Balla
 
Communicable diseases warning issued after floods in Philippines
Manila, Sep 20 (IANS) The Philippines Department of Health (DOH) Saturday warned the public of the transmission of communicable diseases following the floods that inundated Manila and surrounding provinces. The DOH...
Read more on Politics Balla
 
Indian rowers qualify for Asiad final
Incheon, Sep 20 (IANS) The Indian rowing teams of Dung Dung Sanjukta-Pratap Tarunikha and Roopendra Singh-Manjeet Singh qualified for the final rounds of the women's pair and lightweight men's double sculls,...
Read more on Sport Balla
 
Pakistan facing over 6,000 MW power shortfall
Islamabad, Sep 20 (IANS) Pakistan is facing an electricity shortfall of over 6,000 MW, with many parts of Punjab province witnessing outages of 20 hours a day. Un-announced load shedding in small and rural cities of...
Read more on Business Balla
 
New Zealand opposition leader concedes defeat in elections
Wellington, Sep 20 (IANS) David Cunliffe, leader of New Zealand's main opposition Labour Party Saturday, conceded defeat in the general election. Cunliffe said in a televised address to party faithful that he had...
Read more on Politics Balla
 
Xi's Asia trip new chapter for China's diplomacy: Minister
Beijing, Sep 20 (IANS) Chinese President Xi Jinping's state visits to India, Sri Lanka, the Maldives and Tajikistan opened a new chapter for China's neighbourhood diplomacy, Chinese Foreign Minister Wang Yi said at...
Read more on Politics Balla