So you want to take care of your entire family’s retirement? Here are three key ways to take the whole family into account as part of your retirement plan.
Retirement Planning for Families Strategy 1: Help Your Child Start Young
Although most children can’t save a lot of money, they can work as teenagers. As soon as your child is old enough to take a job and earn income, he is eligible to open and fund an IRA. Of course, your child may spend some of the money he earns on hobbies or books. To really help your child, put some of your money in his IRA. Or, to teach about savings and simultaneously provide motivation, tell him that for every dollar he saves, you’ll put in some additional amount.
One thing to keep in mind: Since your child is likely in a very low or zero percent tax bracket, a Roth IRA probably makes even more sense than a regular IRA.
Retirement Planning for Families Strategy 2: Start a Spousal IRA
In the event that you or your spouse does not work, retirement planning opportunities for the non-working spouse are limited. One remaining important option is a spousal IRA. As long as the working spouse earns at least twice the annual IRA contribution limit, both spouses can contribute the maximum to their IRAs each year. Provided you qualify, you can choose either a regular or a Roth IRA.
Retirement Planning for Families Strategy 3: Get Your Estate Plan in Place
Estate planning is not only for rich people. Indeed, anyone with minor children should consider creating a will a top priority. Only a will can determine the guardianship of minor children in the event both parents pass away. And while a revocable living trust isn’t necessary for everyone, widespread benefits are available for those who take the time to arrange one.
