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Unexpected Financial Responsibility Risk1

May retirees have additional unanticipated expenses during the course of retirement, in many cases due to family relationships and obligations.  Whether it's your parents, children, or grandchildren, you may be called on to offer some financial support at some point in your life.  Life events such as the birth of a child, a wedding, health issues, or a divorce are difficult to predict, but they may occur.

For example, assume someone's adult child, a single parent, lost their job and needed financial assistance.  They decided to pay the child's mortgage until she gets back on her feet.  They want to validate that they can afford this expense.  They do not want to be in the position to help their children early in retirement only to become a financial burden to their children later in retirement.

Consider the following factors to see why this can be such an important issue:

  • Six in ten (62%) aged 50+ today provide financial support to family members.
  • Older adults are concerned about running out of money and being a burden to their families.
  • 5.8 million children in the U.S. live in grandparents' homes.

1 Retirement Risk Solutions, David Littell, The American College of Financial Services, 2017.

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