Why You Should Include Your Kids (Or Grandkids) In Your Retirement Planning Sessions

Retirement planning is a very personal process that has to be customized to each person. It isn't always the most interesting process, but it is necessary. One way to make it a little more interesting is to involve your young kids or grandkids who have a grasp of basic math. While they can't give you advice, you can go over the types of plans you have to look at and discuss the basics with them. Sometimes teaching someone else about something is the best way to get clear about how that thing works and how it can affect your life.

They Likely Won't Learn This in School

Talking about different types of retirement plans with kids can help give them an idea of what this sort of financial planning involves. They likely won't learn about retirement planning in school, and while you don't want to scare them with images of needing to scrimp and save all their lives for retirement, it's good to give them a look at the process. Before you know it, they'll be off to college or get their first job, and if they already know that retirement planning is a long-term process, they'll be better equipped mentally to start the process.

They Need to Learn About Compound Interest Now

Young children who have already learned basic multiplication can handle the basic idea of compound interest. The sooner they find out about how it works and why it's so important, the better, as this knowledge will help them when they start their first savings account, get a credit card, and have to decide whether or not to take out student loans when they're applying to colleges. When you explain how that interest will help you save for retirement, they'll be able to see a concrete example, and you and the kids can then discuss where they might encounter compound interest in their lives.

They'll Definitely Point out Your Math Mistakes

You wouldn't be the first person to make a small mistake when figuring out how much you might need per month or how much you'd have to cut your budget by; when you're dealing with a lot of numbers, it's common for a few oops moments to slip through. If you've got your kids or grandkids looking on, though, they'll be all too happy to point out any calculation errors. That will actually save you time in the long run!

You should eventually speak with a financial planner about the funds you're interested in and how they can further your goal of having a comfortable retirement. And then speak with your kids/grandkids occasionally about good financial habits to start them on the road to saving wisely.