We’ll try to find a way so everyone in our family is happy

Adele and her husband are both 48 years old and have good jobs and simple tastes. This has resulted in them having a combined net worth of about $8 million. They are planning to retire, but she is not quite sure whether they should stop working during their prime earning years or stay on the job to provide a larger inheritance to a child who may not earn much money.

You are in doubt whether you have the right to retire without providing your son with a more secure well-being?

Adele: Yes. We are thinking about retiring and moving at the end of the year, but I’m feeling guilty because I thinks I should keep working and earning to set our son up with more of an inheritance.

So, you have a problem whether you should sacrifice your dreams of early retirement to save more money for your son, or should quit work and allow your child to make his own way in the world?

Adele: Yes, that’s it.

How much do you think parents owe their kids?

Adele: You see, the answer may be different. It all depends on how you feel about it. Of course, we’ve already done a substantial amount to set our son up financially. Our son is in college and he will be graduating with no student loans and enough money to attend graduate school without borrowing. We’ve also set him up with a stock account worth around $250,000.

And what does your husband think about it? Does he agree to keep working to help your son more?

Adele: Well, he thinks that we’ve provided enough of a head start for our son and it’s now time for him to take over and earn his own money.

However, I’m feeling guilty and selfish about going off to relax and spend our money — especially since our son is majoring in a field that is a perfect fit for him but that is not going to come with high pay.

Well, he’s very hard-working, doing jobs and internships while in school but my goal is to protect him from ever having any financial struggles. I’m afraid he won’t be well-off, especially in this financially unstable time.

But you’ve done already a lot. And after supporting your child through grad school and starting him off in life with $250K, you’ve absolutely fulfilled your moral responsibilities as a parent.

Adele: Agree. And my husband thinks the same. However, my fears about our child’s future well-being are really impacting my ability to enjoy our money so it’s not as simple as saying I’ve met my obligations. I think we deserve to enjoy our money even if that means giving our son more of it.

Well, it doesn’t mean you have to put off early retirement. You can, and should, find a way to balance both your desire to stop working and your desire to shield your son from money hardships.

Adele: Perhaps, my excessive concern for our son’s inheritance is most likely the wrong approach. We’ll hopefully live a long time and often, by the time young people actually receive an inheritance, they are already well established in their careers and have been supporting themselves for decades.

Our relatives also tell me that rather than thinking about what money we can leave to our son in 40 or 50 years, we should look at finding ways to help our son now. They say we should see if we can find a way to do that financially while still being able to retire early.

What does your financial advisor say, will your annual investment income be enough for you to live on?

Adele: Experts say, with an $8 million net worth, we should receive an annual income from our investments of around $300K assuming we follow a safe withdrawal rate which experts now put at 3.7%.

Will $300K be enough for you to live on?

Adele: We have “simple tastes” and are planning to leave our high-cost-of-living area upon retirement, this would likely give us plenty of extra money.

I think we could gift some to our son each year, or save up the funds to help him buy a house when he is ready.

Have you consulted with psychologists about whether it’s right for you to feel obligation to your son though you are already leaving him a good inheritance?

Adele: Psychologist say that by all objective measures we’ve done enough and we shouldn’t feel we have any obligation to our son. They think that if one of our ways of enjoying our money is to provide for a child who we say is hard-working but just might not make much, then there’s nothing wrong with that.

I think we shouldn’t give up our retirement plans, but should instead find a way to do both so everyone is happy.

By Alex Arlander | ENC News