The following, written by Donna Fuscaldo, was published on Kiplinger online in late June 2026. Many retirees face this situation, so I wanted to share this article if you are currently considering giving your kids a large sum of money. Hope it helps!
“Want to give your kids money in retirement, ask these 3 questions to protect your nest egg and their financial future.
Your daughter needs money for a down payment on a new house. Your son needs a loan to wipe out high-interest debt. Another child wants cash to pursue a graduate degree. As parents, it’s entirely natural to want to step in and help. But if you’re already retired, you need to think twice before opening your wallet. After all, you don’t want to jeopardize your own financial security for the sake of theirs.
In retirement, you’re living on a fixed income, which means any unplanned financial support you give your kids will come directly from your nest egg, leaving less money to fund your own lifestyle or for your estate. Even if you can comfortably afford the hit, that doesn’t automatically make it the right move. Sometimes, bailing adult children out only serves to enable bad financial habits.
Mixing family and finances is always complicated. Before you sign any checks, make sure you ask yourself these three critical questions.
1. Why do they need the money?
The first question to ask is: What do they need the money for? Before you can go any further in the decision-making process, you have to determine if the reason is worthy of consideration, says John Rafferty, partner and investment advisor representative at Solomon Financial. Equally important is who is asking. Do they have a history of asking for money, and will giving it to them enable bad money habits?
If the money is for a good reason, ensure it will put them in a better situation in the future. Can your child afford the home you are giving them a down payment for? Will they incur more debt if they pay down the existing debt? Is the degree worth the ROI?
“Sometimes you think you are helping them buy a house that they can’t afford, and it puts undue stress on them,” says Paul Jarvis, a wealth advisor at Prime Capital Financial. “It’s better to have an open and honest conversation about what the gift is meant to accomplish.”
2. Can I afford it, and if not, am I willing to work or sell assets?
If you’re okay with the reason your child needs money, the next question you need to ask yourself is: Can I afford it, and if not, am I willing to make sacrifices to get it?
If you can afford to help, the money will likely need to come from investments or retirement savings. Choose your funding source carefully to minimize taxes and sequence-of-returns risk. Pulling from a tax-deferred account, like a traditional IRA, will increase your taxable income, while withdrawing from a tax-free account, like a Roth IRA, means giving up years of compound growth, possibly creating a retirement shortfall.
If you can’t afford it, are you willing to work part-time or take on debt to give your child money? “If I were not enabling my child, I would much rather suffer than my child,” if it were an emergency, says Rafferty. “If the child is showing the propensity to ask for money, then the answers are different.”
3. Will this be a gift to one child, or will I match it for the others?
Some families prefer to give equally to all their children, regardless of individual need. The thinking goes that if money is given to one kid, it should also be given to the others. If you fall into this camp, you have to ask yourself: Will this be a gift to one child only, or will I match it for the others? If the latter, how will I give them the extra money?
“Is there a way you can ensure you treat all your children the same way?” asks Rafferty. Ultimately, he notes, it is your money, so perfectly equal distribution is a choice, not a rule.
Be smart about helping
Many retirees want to help their children and have the means to do so. But before you open your wallet, think about what it means to your retirement and your kids’ financial future.
Are you enabling bad financial behaviors or putting them on the path to financial freedom? Will this hinder your retirement plans or have little impact? Asking yourself those three key questions will protect your own financial security while helping, rather than hurting, the ones you love most.”
Helping your child with college expenses, a down payment on a house, or medical expenses seems like a good reason, and most parents wouldn’t hesitate to help out if they can; however, this article helps point out the pitfalls of doing so if you put your own financial security at risk. That can carry over later and end up burdening the very child you were trying to help—all things to consider. But if you are like many of my clients, and want to do everything you can for your children, a huge step in that direction is to ensure you have your affairs in order and keep them updated over the years. For some, that might just be a simple will; for others, a plan complete with a will, a trust, and other legal documents. All to protect your hard-earned assets and your loved ones. Having a will is always better than not having a will. So, if you don’t have one yet, let’s start with that. Please call me to schedule an appointment so we can ensure your family is protected. My number is 513-399-7526. Or visit my website www.davidlefton.com for more information.
Source: Kiplinger online, June 2026 written by Donna Fuscaldo