income

Top Tips for Business Owners to Maximize Retirement Income

Posted on July 14, 2017 by fsykes - Business Owners, Social Security Benefits

Are you a business owner with an at-home spouse who helps out with bookkeeping or a variety of other tasks that need to be done? Once you get to retirement age it’s too late, but for those of you that are in your 20’s, 30’s, 40’s or even 50’s there’s still time to let these efforts build future benefits. Paying your spouse at least $4,880 a year will ensure that they continue to vest into the Social security system, which will help you at retirement time.

To fully vest you need to earn 40 credit hours, with a maximum of 4 credits per year at $1220 per credit. Spouses who are not vested can still pull a half benefit off of their working spouse’s retirement benefit (or ex-spouse’s, if married over 10 years). If widowed after being married 9 months or more, you can draw benefits up to your deceased spouse’s full amount, depending on what age decide to file.

If both spouses have work history the social security retirement benefits picture can drastically change for the better. With two vested partners you’ll also have more options, such as the potential for the lower earning spouse to pull earlier while delaying the higher earning spouse’s filing until age 70 to get the highest benefit. And don’t forget that social security disability benefits are hinged on a person working at least 5 out of the last 10 years, which can help when the worst happens.

As you can see, it’s in your best interest to ensure that the work both partners contribute to your business is recognized as paid employment by the Social Security Administration. We offer a pre-check social security flat fee planning option that will help you review where you are today and give you insight about the impact on future income you can make by ensuring that both spouses are being paid for the work that they do.

Please “Select a Plan” so we can get started on maximizing your social security benefits or take our quiz to find out how much you know about your social security.

What Every Expat Needs to Know About Social Security

Posted on July 10, 2017 by fsykes - Expat Social Security, Social Security Benefits

So you have decided to work or retire out of the United States. How does this affect your Social Security and Medicare benefits? The answer varies by country, and it will work out better for you in certain countries than in others. It’s important to understand what is at stake. We broke down what Expats or (Expatriate) needs to know

About 20 countries have agreements to prevent double taxation. In the rest, you will pay taxes to your host country as well as Uncle Sam.
About 25 countries maintain bilateral agreements that allow you to transfer social security credits to and from the US. For example, if you work in the US for 20 years and then move to Canada and work there for another 10 years, when you retire you can transfer your US credits to Canada to vest into their system (or vice versa).
There are a few countries, such as North Korea and Cuba, where you will not be allowed to receive social security benefits while living there.
Your non-US spouse may or may not be entitled to your benefits if you were to pass. The laws vary by country and are quite complex.
If you think you will ever move back to the US then it is very important to sign up for Medicare part A, which is free, at age 65. There are ways to opt out of part B if you qualify, but if you do not sign up for part A there are permanent penalties that will persist throughout your retirement.
If you worked overseas and did not pay into social security for certain years, your pension from that country will most likely trigger a Windfall Earnings Provision (WEP) that partially offsets your social security benefit.

Determining retirement benefits for expats can be a confusing and complex situation, with many country-specific rules that change over the years. If you need help navigating social security options for expats and their families, please visit our website at www.socialsecuritybp.com to learn more.

Stop Screwing Yourself, Business Owners!

Posted on July 6, 2017 by fsykes - Business Owners, Social Security Benefits

Business owners typically prioritize the success of their company over other financial goals. That’s a good thing in general, but it’s important to keep a balance or you could be creating a host of long-term financial problems for yourself while you’re trying to do the right thing.

A common pattern I see with my clients is that they pay themselves as little as possible and put the vast majority of the available money back into the business. That may be good for the business but it’s not necessarily a smart move for your overall financial picture. When it’s time for retirement, problems arise:

Little Social Security income. By keeping the amount you pay yourself low over the years, you deprive yourself of Social Security benefits you might have been able to collect later. The amount of monthly benefit you receive is calculated based on your average earnings over a 35-year period. If you didn’t pay yourself much, the government won’t either.
Minimal retirement savings. When you plough all the profits back into the company you reduce the amount available to fund your personal retirement account. That means you don’t have a substantial nest egg that’s growing to take care of you once you’re ready to hand the business over to new owners.
Expecting too much. Selling your business when retirement beckons may deliver a nice bundle to provide for your financial needs in the coming years. Then again, it might not. Economic conditions shift, and the type of business you own can make a huge difference in the amount you can actually sell it for.

Take care of your business, but be sure to look out for your own best interests as well. Paying yourself a fair wage and investing in assets like equities and real estate are just as important as that new equipment or extra staff member your company could use. The money you pay into Social Security and invest privately will work together to give you a higher income in retirement than you’d have otherwise.

If you’re not sure how much you should be paying yourself or investing, please contact us today and we’ll help you find the right balance. You deserve a comfortable retirement!

Social Security Benefit Planners
800.270.SSBP (7727) info@socialsecuritybp.com

Are Employees of Foreign Governments Covered by Social Security?

Posted on July 5, 2017 by fsykes - Social Security Benefits

Working inside the U.S. as an employee of a foreign government or an instrumentality of one can mean you’re not covered by Social Security. These workers include diplomats, embassy employees, non-diplomatic representatives, consular officers and employees of foreign government instrumentalities (non-commercial organizations that function on behalf of a foreign government).

Whether or not your work will be counted toward Social Security benefits is controlled by your citizenship status.

U.S. Citizens who work for a foreign government are treated as self-employed citizens are for Social Security. Your employer will not withhold Social Security taxes but your earnings can still count toward your coverage under the program. You are responsible for paying self-employment taxes on the income. Citizens who work for an instrumentality are covered by Social Security, but their earnings may be treated as employment or self-employment based on three conditions. The U.S. Department of State and the IRS will determine which category your work falls into.

Non-citizens are not covered by Social Security for work they perform for a foreign government. Their employment for an instrumentality of a foreign government may or may not be covered by Social Security, depending on same three conditions mentioned above.

Dual citizens who hold citizenship in the U.S. and another country are covered by Social Security in most cases, but depending on the country for which they are working, they may need to pay self-employment taxes or not. Dual citizens who work for an instrumentality of a foreign government may or may not be exempt from paying Social Security taxes on their earnings. Reciprocal social security agreements between the U.S. and foreign governments vary by country, so it is important that dual citizens speak with a qualified professional or governmental administrator to determine program eligibility and tax responsibilities.

If you want to understand options that pertain to your situation please go to our “Select a Plan” and sign up for one of our planning options. Use FOREIGN2017 to receive $50 off any plan.

Social Security Expert Faye Sykes on the Air with Radio Host Dana Barrett

Posted on May 22, 2017 by fsykes - Radio Shows

Faye Sykes, CEO of Social Security Benefit Planners joined us in studio during hour one of today’s show! Faye explained the right time to take social security and how she and her company is able to help families maximize their social security benefits.

During hour two, Jackie Cannizzo, Executive Director of JCI Foundation joined us to dish on two upcoming events you don’t want to miss! The JCI Foundation will host the Judson Women’s Leadership Conference on June 20th at the Cobb Galleria; a great opportunity for women to learn and be inspired by successful leaders from all walks of life.

The Birth of Social Security in America

Posted on May 16, 2017 by fsykes - Social Security Benefits

We take Social Security for granted, but where did this important insurance program come from and when did it start? It hasn’t been around forever, has it? The answer is no. Social Security began after the Great Depression, when millions of Americans who had lost their savings were facing an old age defined by stark poverty. Few workers had pensions through their jobs, and President Franklin Roosevelt wanted to do something to alleviate the poverty that faced so many older workers in their retirement years.

Since its creation in 1935, millions of retirees have been able to live more comfortably because of this national insurance program, which they collectively funded through payroll taxes during their working years you will see this as FICA on your payroll statement. Though Social Security wasn’t meant to be the only source of income for beneficiaries, it was in its early years and, unfortunately, it still is today for many. As per Social Security fact sheet in 2017 21% of married couples and 43% of unmarried persons rely on Social Security for 90% or more of their income. Many people do not realize that this is a program that has a life insurance, disability and retirement income benefits that you and your family can benefit from.

With changing demographics that include more retirees and fewer workers, Social Security has had to evolve over the years. President Reagan signed into law several revisions to Social Security after Congress passed suggestions made by the Greenspan Commission, which had reviewed the program’s financial picture. These changes included an increase in the payroll tax that pays for benefits as well as a gradual increase in the retirement age, from 65 to 67.

In the future, it’s likely that more changes will have to be made to keep the program financially sound. The prospect can sound alarming, but making necessary tweaks to keep a valuable program that provides millions of Americans with the basic income they need is well worth the effort. Long live Social Security!

For a full customized projection of your Social Security income please sign up for a plan option or learn more at www.socialsecuritybp.com.

Not associated with or endorsed by the Social Security Administration or any other government agency.

Broke as a Joke? Social Security’s Finances

Posted on May 8, 2017 by fsykes - Social Security Benefits

Is Social Security broke? Reading the news can sometimes leave you with the impression that Social Security is practically out of money. This massive program provides key income and takes in millions of dollars each year, but is it going belly-up?

Here’s how it works. The payroll taxes that you and everyone else pay each month (FICA and Medicare) go to the treasury, where they are counted as credits to the Social Security Trust Fund. Those who receive Social Security benefits get their money from what’s paid in, but there is some left over. The excess is invested in special issue U.S. Treasury bonds, which earn interest. The interest is credited to the trust fund, as well.

Right now, more money comes into the program through taxes and interest than goes out in benefit payments. Years of this excess pay-in has created a surplus that amounted to $2.7 trillion by 2014’s close. That figure will continue to increase until 2019, when the surplus is expected to reach $2.8 trillion.

But as the Baby Boomers retire and smaller birth cohorts begin to fill the ranks of the workers whose taxes fund Social Security, there will be more money going out in the form of benefits than there is coming in through payroll withholding taxes. At that point, the treasury bonds that the Social Security Trust Fund owns will be needed to help cover the benefits that beneficiaries receive.

The program is expected to fully utilize its surplus in 2034, which will leave payroll taxes as the only source with which to make benefit payments. According to current projections, those taxes will cover approximately 79% of the anticipated amount needed. Congress will have to decide whether to cut benefits or increase funding, which they could easily do by raising the limit on the amount of income to which FICA and Medicare taxes apply.

Social Security isn’t exactly going broke, but it will need to be tweaked in order to provide the benefits that today’s workers have been promised when they retire. Do you have an opinion on how to handle the future shortfall in the program’s budget? Let your senators and representatives know!

To receive your own customized Social Security benefit projections please visit our website www.socialsecuritybp.com to learn more or sign up for a plan.

Not associated with or endorsed by the Social Security Administration or any other government agency.

Social Security Is More than Just a Retirement Plan

Posted on May 3, 2017 by fsykes - Retirement Benefits, Social Security Benefits

Social Security Isn’t Just for Retirement

When you think of Social Security, you probably think about retirement. It’s true that the program provides critical income for millions of retired Americans, but Social Security also does much more.

Designed as a safety net to provide older people who could no longer work with a basic income, Social Security has grown into a much broader safety net over the years, offering financial benefits to protect not only retirees, but also disabled workers and the families that have lost a family member.

Just a few years after the program began, it was expanded to provide benefits for the spouse and any minor children of a deceased worker. Starting in 1939, survivors could receive financial support from Social Security if the family’s breadwinner died. This makes it function as the largest life insurance program in the country, although it’s not generally considered to be one.

Would you think of the payroll deductions you contribute to Social Security as disability insurance premiums? Probably not, but in 1954, Social Security also began making payments to disabled workers and their dependent spouses and/or children. Trying to purchase the same kind of disability protection that Social Security offers can be prohibitively expensive, or even impossible for some workers. With Social Security, everyone who has worked enough to buy into the program is covered. Typically, you need to show that you have earned over the minimum amount to vest currently $5,200 per year five out of the last ten years.

Retirement benefits are an important and well-known part of Social Security, but don’t mistakenly believe that’s the only thing it does. Social Security protects working Americans and those who depend on them in many different and equally valuable ways.

There are over 2,700 regulations that oversee Social Security which affect life, disability and retirement benefits. Please check out our website www.socialsecuritybp.com to learn more or to sign up for a customized plan.

Not associated with or endorsed by the Social Security Administration or any other government agency.

Social Security Is a Lifesaver for Many Women

Posted on April 25, 2017 by fsykes - Social Security Benefits

Social Security a Women Lifesaver

Social Security is a retirement, disability and life insurance program and if you’re a Woman, this can be a lifesaver in retirement. It’s not that women are more interested in a financially secure old age than men. Americans of both sexes rely on Social Security for critical support in their retirement years, but for a variety of reasons, it’s often women who depend on it the most.

Longer lives – Women, on average, live longer than men. Without sufficient private retirement savings, this longevity can result in Social Security being the sole or majority source of income. The potential of running out of retirement savings is a problem that affects many retirees, but because of their longer life expectancy, more women end up counting on Social Security alone to support them.
Smaller paychecks – Sadly women on average don’t earn as much as men. They often work in fields that are lower-paid than those where men predominate, and even in the same job women frequently earn less than a man does in the same position. Fair? Maybe not, but it’s a fact. That makes it harder to save for retirement and reduces pension benefits, where they exist. As a result, Social Security often forms a greater part of women’s retirement income than men’s.
Fewer working years – Between raising children and caring for aging parents, women often take years out of their careers that men do not. While some men do choose to stay home with children or serve as caregivers for parents, it is far more likely that a woman will do so, statistically speaking. Since the formula that determines Social Security benefits is biased toward lower-earning workers, women get some protection from the hit they would otherwise take from a shorter work history.
Less other retirement income – Men are more likely than women to have pensions through their jobs, and to have larger pensions than the women who do qualify (partly because of women’s shorter work histories and lower wages). Without this additional income in retirement, women tend to be more dependent on the benefits they receive from Social Security than men are.

Social Security shouldn’t be your only plan for retirement income, but whether or not it is supplemented by private savings, if you’re a woman, it’s a critical component. Having a plan with your spouse before taking benefits can make a huge difference in how much money is available in retirement. Sign up today to have your own customized Social Security plan www.socialsecuritybp.com or info@socialsecuritybp.com.

Not associated with or endorsed by the Social Security Administration or any other government agency.

Redo for Social Security Retirement Benefits

Posted on April 17, 2017 by fsykes - Retirement Benefits

Did you sign up early to start receiving Social Security benefits? If you’ve only recently begun to take benefits, you can still change your mind. For the first twelve months that you’re receiving Social Security income, you have the option to reset this to a later date and increase your payments.

During the initial year, you can halt your monthly payments and delay benefits to get further increases with age 70 being the maxed benefit. This flexibility comes at a cost though; you’ll have to pay back any amount you have already received. For some people, doing so is worth it, if you took benefits at age 62 this is up to a 30% reduction in benefits for the rest of your life. Each year you delay between ages 62 and 70 gives you a nice increase. If you’re the breadwinner in your family ideally you should wait as long as possible as a survivor spouse only gets the higher of the two.

It isn’t just the currently calculated benefits that will be affected, either. Since Social Security cost of living increases (COLA) are figured as a percentage of your current benefits, delaying until full retirement age or longer means that each year you receive benefits you’ll have a higher amount from which to calculate annual COLA increases.

Unless you really need Social Security income as soon as you are eligible, it’s usually best to wait until your full retirement age or when it maxes out at age 70. One of our Social Security retirement advisors can help you find the best time to take benefits, or help you halt benefits now to increase your retirement income later. www.socialsecuritybp.com to read more, info@socialsecuritybp.com or call 877-270-SSBP (7727)

Not associated with or endorsed by the Social Security Administration or any other government agency.

Social Security & Your Full Retirement Age: Are you leaving retirement money on the table?

Posted on April 12, 2017 by fsykes - Retirement Benefits

The Social Security term “full retirement age” or FRA is unfamiliar to many people, but it shouldn’t be. Your birth year is one of two factors in determining your Social Security retirement income. Your full retirement age (FRA) is the point at which you can begin taking Social Security retirement benefits at the full amount based on your individual work history. The second factor is how much you paid into the Social Security insurance program which is shown as a FICA deduction. If you have not pulled your statement recently you can go to www.ssa.gov to review your personal history.

Although you can elect to take benefits as early as age 62, that’s rarely a good idea. Taking benefits before your FRA will cost you big-time – as much as 30% of your monthly benefits! So, what is your full retirement age? That depends on when you were born. Congress has gradually raised the FRA, meaning that it is different for different birth cohorts. There are some nice increases in your Social Security retirement checks by delaying your start date with age 70 being when your benefits max out.

For those born in 1954 or earlier, the FRA is 66 years. You can start collecting full benefits as soon as your 66th birthday. Those born later will have to wait a bit longer before taking retirement benefits to receive the full amount:

Birth Year Full Retirement Age
1943-1954 66
1955 66 years and 2 months
1956 66 years and 4 months
1957 66 years and 6 months
1958 66 years and 8 months
1959 66 years and 10 months
1960 or later 67 years

Almost 50% of American’s elect to take Social Security at age 62! Don’t risk losing almost a third of valuable retirement income but not understanding the true cost of taking this early.

Sign up today to have one of our Social Security retirement advisors www.socialsecuritybp.com help you understand when is the best time to start taking benefits.

Not associated with or endorsed by the Social Security Administration or any other government agency.

Social Security Expert Faye Sykes on the Air with Radio Host Eric Holtzclaw

Posted on April 4, 2017 by fsykes - Entrepreneurs, Radio Shows

Planning today for tomorrow. Social Security expert Faye Sykes, NSSA, CLTC, National Social Security Advisor and CEO of Social Security Benefit Planners joined radio show host Eric V. Holtzclaw on Build Your Best Business to highlight steps all entrepreneurs can take to protect their retirement income.

Faye shares what inspired her to enter into this niche market and add on to her current services to help both new and existing clients and expand her business. LISTEN NOW!

Common Retirement Fears

Posted on April 4, 2017 by fsykes - Retirement fears

Do you have fear around retirement? A startling number of Americans do, so don’t feel silly if thinking about the whole idea of retirement just makes you want to shut down.

The very common response of fear and anxiety when thinking about retirement stems from several sources. Getting older itself is anxiety-provoking for most of us. We want to stay young and healthy forever, and it can be unsettling to admit that this isn’t how our lives are going to work.

But beyond the basic discomfort with aging, there’s often a more specific fear around the idea of retirement. That fear frequently leads even highly intelligent people to push away the thoughts and ignore the issue. It’s a natural response, but an unfortunate one because avoiding the issue is precisely the action that is most likely to lead to a negative experience at retirement.

If you do make yourself examine your fears around retirement, you’ll probably find that they center on four questions that many people share:

• Will Social Security even be there when I retire? This is a reasonable fear, given that so many politicians try to inspire panic about the program’s future. But Social Security has been around a long time and it probably isn’t going anywhere. True, the funding formula and/or benefits will need to be adjusted at some point, but the situation is nowhere near as dire as some make it sound. You’ve been paying into Social Security for many years and it will almost certainly pay you back in your retirement years. Don’t depend on the program as your only income in retirement, but don’t worry too much about it either. Social Security is going to be there.

• What if I didn’t save enough? This question is another valid concern. Most people don’t save enough to provide the same income they had when they were working. Since we’re living longer now, it’s more important than ever to build your retirement savings. You know this, so don’t waste time in fear of the future; save for it instead. Talking with a retirement planner can help you understand just how much you’ll need to save each month so that you will have enough funds to live comfortably for many years after retirement. This is one area where ignoring the problem will only make it worse, so face your fear and talk with your financial advisor. Taking action feels good, and you’ll thank yourself later.

• Will I be bored and lonely not working? As our parents age, we sometimes seem them struggle with these issues. It’s natural to wonder if you’ll face the same problems. Retirement can be a lonely time or a wonderful period to pursue old and new interests, relish relationships with all kinds of people and thoroughly enjoy yourself. To ensure your experience is positive, it’s important to prepare yourself for the changes. Remember, you don’t have to retire all at once. You can work less over gradually in many cases, while also strengthening your social networks and engaging in interests that you didn’t have time for when you were working full time. Make friends and hobbies a priority now, and you’ll be thrilled to have more hours to enjoy them when you retire.

• What about health care costs? The rising costs of health care inspire fear in most people, whether they’re working or retired. Save for retirement expenses, including health care, but don’t let the fear paralyze you. Medicare is one of the most generous health insurance programs available, and you’ll qualify for it by the time you retire, most likely. Also keep in mind that the healthcare landscape is changing, and costs may not be as high as you fear when you actually retire.

Retirement fears are real and reasonable. Taking an active stance as you prepare for your retirement and examine the reasons for your anxiety will go far toward alleviating those fears. It will also reduce the risk of those fears coming true, so don’t play ostrich any more. Look forward to retirement with your eyes wide open, and take advantage of your current opportunities to ensure a positive experience later.

Not associated with or endorsed by the Social Security Administration or any other government agency.

Social Security Myth #7: Is Retirement Income Taxable?

Posted on March 27, 2017 by fsykes - Retirement Benefits, Social Security Myths

MYTH: Your benefits are not taxable in retirement.

Surprise! If you continue to have earned income in retirement while receiving Social Security, then part of your Social Security income can be included in your taxable income. That’s not to say that everyone pays taxes on Social Security
benefits or that the full amount is taxable, but it’s important to know that some of your benefits may be taxed. About half of all beneficiaries paid federal tax on Social Security in 2015.

To figure out whether your benefits are taxable or not, you’ll need to understand the IRS’ definition of “combined income.” This means your adjusted gross income plus any nontaxable income you receive, added to one half of your Social Security benefits. The total of these three numbers will determine whether your benefits are taxed, and how much.

If you are single and have a combined income of $25k to $34k you’ll owe taxes on up to 50% of your Social Security benefit. Couples that earn between $32K and $44K a year and file jointly will owe the same rate if their combined income is between $32k and $44k.

For single filers with combined incomes over $34k and married filers whose combined income exceeds $44k, the portion of benefits that may be taxable is 85%. That’s assuming the married couple files taxes jointly. Filing a separate return makes it far more likely that your benefits will be taxable.

You may also pay state taxes on part of your benefits if you live in Minnesota, North Dakota, Vermont and West Virginia; these states mirror the federal tax schedule. The following nine states may also tax a portion of Social Security but provide exemptions based on income and age: Montana, Colorado, New Mexico, Utah, Nebraska, Kansas, Missouri, Connecticut and Rhode Island. The remaining 37 states not listed above do not tax Social Security.

Not associated with or endorsed by the Social Security Administration or any other government agency.

Social Security Expert Faye Sykes on the Air with Ryan Poterack

Posted on March 22, 2017 by fsykes - Radio Shows

Planning today for tomorrow. Social Security expert Faye Sykes, NSSA, CLTC, National Social Security Advisor and CEO of Social Security Benefit Planners joined radio show host Ryan Poterack with expert advice on Social Security planning. LISTEN NOW!

Not associated with or endorsed by the Social Security Administration or any other government agency.

Podcast: Play in new window | Download

Social Security Myth #6: No more Social Security?

Posted on March 21, 2017 by fsykes - Family Benefits, Social Security Myths

MYTH: Social Security will go broke in the next 20 years.

That’s a scary statement, and it gets tossed around frequently. Should you worry about it? Not really. Social Security is essentially a pay-as-you-go system. The workers today are paying through their FICA taxes for the benefits current retirees are receiving.

In 2017, if you are W-2 employee you pay 7.65% of your income into the program and your employer pays an equivalent amount. Self-employed workers are required to pay the full amount of 15.3% (but they may be able to deduct some of the expense when they file their annual tax returns).

Any surplus money currently goes into a trust fund and is invested into treasury bonds. By 2034 the trust is projected to run out of money, and this is the source of the scary “going broke” concept. Even if the projection is accurate, however this doesn’t mean that benefits will stop all together. The payroll taxes alone from those working in 2034 should still cover about 79% of promised benefits.

But it’s true that in this scenario there would not be enough money for the program to continue exactly as it is. Congress will need to act by raising taxes, cutting Social Security benefits or both. We should expect a solution to be hammered out long before 2034. Though either of these options would be hard choices that will no doubt inspire real debate, the risk to millions of Social Security beneficiaries that vote will hopefully get politicians of all persuasions to act in plenty of time to prevent the program from facing a true crisis.

Not associated with or endorsed by the Social Security Administration or any other government agency.

Are You Part of the Sandwich Generation?

Posted on March 9, 2017 by fsykes - Retirement Benefits, Retirement fears, Social Security Benefits, Uncategorized

Many Americans today are part of what is known as the sandwich generation. No, that doesn’t mean covered in peanut butter or surrounded by lettuce and tomatoes. It refers to being economically sandwiched by two other generations, one older and one younger, that rely on you for financial support.

Providing emotional support for parents and children is part and parcel of being human. It’s both demanding and rewarding, but also creates some fear for the future. Providing financial support for these loved ones while taking care of yourself and your own future, however, can be tough. For many, it seems like an inescapable burden, and fulfilling it can leave you unable to provide sufficient resources to meet your own needs.

If you’re still funding your adult kids’ lifestyles and struggling to take good care of your parents’ financial needs at the same time, you might want to consider whether it’s the best strategy. Despite the desire to provide everything you can for your family, this financial sandwich can leave you in a bad situation a few years down the road.

Your kids have their whole life to pay back college and other debts. It feels good to provide your children with a debt-free college education and help with a car, house or other steps toward the good life. But can you afford it? Ignoring your financial future so you can give them the best start isn’t in anyone’s best interest. If you can’t support yourself in retirement, they’ll feel duty-bound to help. It’s often better to let them take out loans to accomplish their goals, while you save for your retirement years. That leaves you better prepared to take care of your own future needs while helping them realize the true costs of their choices and value them appropriately.
Learn from your parents and save more toward retirement. The financial sandwich you’re in now should illustrate the importance of saving for retirement. It’s more expensive than most people expect, between rising healthcare costs, inflation and longer lifespans. You’re seeing that first-hand with your parents; learn the lessons that their predicament illustrates and get serious about saving now, so you won’t be in the same one later.
You cannot take out loans for retirement. While it’s relatively easy to get a loan for a college education, house or car, just try asking for one to pay for retirement expenses. Lenders will laugh at you! Once you’re past working age, it’s virtually impossible to get a loan unless you can prove you have the resources to pay it back. That’s not a situation that inspires confidence for older Americans who need extra income just to get by, so let the kids get a loan now. It’s far easier to obtain and pay back than the one you’ll need if you don’t save enough for your retirement.

What’s the takeaway? Giving your retirement savings short shrift so you can keep paying for the generational sandwich isn’t wise. If you don’t have enough saved, it’s helpful to do what you can to maximize your Social Security income. But in the big picture, it’s probably more important to save for your own retirement than to fully fund your children’s college and post-college years.

Not associated with or endorsed by the Social Security Administration or any other government agency.

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