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How Clients Can Help Out Family—Without Overdoing It

January 27, 2020 
Dr. Kristy Archuleta

If they’re not careful, aging couples’ generosity toward their children and grandchildren can erode their savings. You can help couples plan their giving without jeopardizing their retirement.

Kristy Archuleta, Ph.D., LMFT
Associate professor, University of Georgia’s College of Family and Consumer Sciences

Dr. Archuleta's research relates to the area of financial therapy and includes dyadic processes influencing financial satisfaction and marital satisfaction.

Winning the lottery is the worst thing that ever happened to Billie Bob Harrell.

After barely being able to make ends meet, with a wife and three children to support, Billie Bob thought he was set for life when he won the $31 million Texas Lotto jackpot in 1997. He quit his job and whisked his family off to Hawaii. Then he gave thousands of dollars to his church, bought cars and houses for friends and family, and even donated nearly 500 turkeys to the poor.1 But his generosity caught the attention of others who felt entitled to a piece of his newfound wealth, and he was constantly pestered for donations. Twenty months later, Billie Bob had depleted all of his winnings.

Likewise, aging couples can risk depleting their retirement savings when they want to provide for their family—especially grandchildren. Wanting to help their family is great, but being bighearted could cause your clients' retirement savings to take a hit if they overextend themselves. Fortunately, there are ways they can balance their generosity toward family members without overdoing it.


What We’ll Cover

  • Why aging couples are often asked for help
  • What happens when couples overdo it
  • Help couples factor giving into their planning


First, Why Aging Couples Are Often Asked for Help

Sometimes family members view aging couples as having a plentiful supply of financial resources available to spend on them. This can apply to aging couples’ adult children but especially to their grandchildren; gifts, vacations, and school tuition are just a few of the things grandparents graciously provide for their beloved grandkids.

Some family members may think things like, “They’ve saved well, so they can afford to help” or “They want to help provide for our kids’ college tuition. That’s what grandparents (or parents) do.” It seems like many aging adults are doing just that. In fact, about 7% of grandparents (4.9 million) have taken on debt to help pay for their grandchildren’s college tuition.2

Though education costs are the number-one expense paid for by grandparents (at an average of $4,075 annually), that’s not the only way grandparents are contributing financially. More than a quarter of grandparents surveyed spend an average of $1,746 on vacations (ranked number two) with their grandkids, including traveling to see them. Fourteen percent spend nearly $1,500 annually providing for day-to-day expenses for family members (number three).2 There are many ways aging couples help out family members financially, but it can have unforeseen consequences.


Top Three Items Grandparents Pay for2


College Tuition:
$4,075 annually


Travel & Vacations:
$1,746 annually


Day-to-day Expenses:
$1,500 annually


Second, What Happens When Couples Overdo It

Mutually agreed-upon support can be beneficial to both retired couples and their children and grandchildren. It helps parents manage responsibilities, while grandparents and grandchildren can enjoy time together. But problems can arise when support morphs into dependency.

Financial assistance sometimes becomes an expectation—and aging couples can find themselves in over their heads. Consistently putting their family’s needs above their own can significantly reduce couples' retirement savings, which could affect their quality of life in retirement.

Additionally, as time goes on, couples can begin to feel taken advantage of—a feeling that will worsen if concerns go unaddressed. Couples may avoid confronting these issues with their children and grandchildren, because they’re afraid of offending them or risking their relationship.


Spouse’s Relationships Can Suffer

Aside from the potential financial risks of providing their family members, it can also cause conflict within couples' relationships. They may disagree on how involved they should be in their children’s and grandchildren’s lives, and how much money they should be spending.

One of them may feel that their children need to do more to manage their own family responsibilities, while the other enjoys helping out. This can lead to clashes over the amount of money that’s being spent on family members. Money disagreements, or not having open and constructive conversations about it, have been cited as the number-one reason couples argue.3 Tension can really increase in retirement if income is reduced or couples begin living on a fixed income. Creating a strategy to financially support family members—without overdoing it—can help prevent this tension.


Third, Help Couples Factor Giving Into Their Planning

Couples often avoid conversations about helping family members financially, but it’s a critical one for them to have. Encourage them to start by getting an understanding of how each of them feels about money, especially in regard to helping family members. How much financial help would they like to provide? How often? For what purposes? They should aim to find some common ground in each of those areas, and then strive to reach an agreement on the details. If they’re struggling to find common ground, they could consider seeking the help of a counselor.

After settling on a decision, the two of them still need to know if helping their family will impact their financial and retirement plans. You can help them determine what they can afford to provide without compromising their savings. After working with you to come up with a giving or support plan, they can have greater peace of mind knowing that they're helping their family without adversely affecting their retirement.

In come instances, couples may not be able to afford to help out family members. If you all agree that helping out family makes sense, they can go for it. But recommend that they be clear with their family members about what they’re able to provide; how much, how often, and for what purposes—and stick to that plan. However, you may have to tell them that doing so will put their savings at risk. If that’s the case, couples can tell their family that they’ve talked it over with you, and tactfully let them know that they can’t help, and why.


Couples Should Remember Three Things About Helping Family Members

First, it’s admirable when they want to help support children and grandchildren financially, but sometimes couples can overdo it. Second, providing too much help for relatives, especially grandchildren, can cause couples to lose their financial security during retirement.4 Third, disagreements over how much support to give family members can result in tension couples' relationships. Figuring out how much to help out family members requires careful decision-making—and it’s not always easy. You can help couples see what makes sense for them.


Couples Should Live and Give Within Their Means

Together, couples work hard to save money so they can enjoy life in retirement. It wouldn’t be fair to either of them to jeopardize that. Being able to help their family members is great, as long as it’s done in a way that fits into their long-term financial plan. Just winging it, like Billy Bob did, could backfire, putting their financial security at risk.


Next Steps

  1. Download or order the client piece below
  2. Share it with clients who are parents and/or grandparents who may be at risk of overdoing it in regard to supporting family members
  3. If you sense that a couple is struggling with decisions about supporting family members, offer to meet and discuss how it could affect their financial plan

The views and opinions expressed herein are those of the author, who is not affiliated with Hartford Funds. The information contained herein should not be construed as investment advice or a recommendation of any product or service, nor should it be relied upon to, replace the advice of an investor’s own professional legal, tax and financial advisors.

1 The Tragic Stories of the Lottery’s Unluckiest Winners, newsfeed.time.com, 11/27/12
2 Pulling heartstrings and purse strings: Grandparents spend $179 billion annually on their grandkids, cnbc.com, 4/10/19
3 The No. 1 Reason Why Couples Fight, investopedia.com, 10/20/19
4 Love Your Grandchildren But Don’t Let Them Ruin Your Retirement, forbes.com, 12/28/19