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Welcome to How to Retire on Time, a show that answers your retirement questions. Say goodbye to the oversimplified advice you've heard hundreds of times. This show is about getting into the nitty-gritty so you can make better decisions as you prepare for retirement. Text your questions to 913-363-1234 and we'll feature them on the show. Don't forget to grab a copy of the book, How to Retire on Time, or check out our resources by going to www.retireontime.com.
You wanna be kind and not nice. Being nice is whatever they need you're gonna help them with. Kindness is holding a boundary with civility. Welcome to the Retire On Time podcast, a show that answers your retirement questions. Say goodbye to the oversimplified advice you've heard hundreds of times.
Mike:This show is all about getting into the nitty gritty. Now that said, remember, this is just a show. Everything you hear should be considered informational. This is not financial advice, so do your research. As always, text your questions to (913) 363-1234, and we will feature them on the show.
Mike:David, what have we got today?
David:How do you navigate helping your kids enter adulthood while saving for retirement and taking care of your parents? So a couple of components there. Right? You're helping your kids, and you've also got your parents. So you're like in the middle of this.
David:You're sandwiched between aging parents and It is actually nicknamed the sandwich generation. Yeah. Wow. Look what I did there. Clever.
David:Unintentional. Yeah. My genius.
Mike:The Let's talk about the kids first.
David:Okay.
Mike:So as much as people love to hate on millennials or Gen Z, you just need to understand that you've got roughly the same chance of getting audited by the IRS as you do submitting an application and getting a job right now. According to a recent survey, it was like if there's like for every job posting, there's roughly 250 applications going in.
David:Mhmm. That seems like not good odds.
Mike:No. They're terrible odds. So AI or operations or just general efficiencies or moving jobs overseas, which has slightly shifted because of the tariffs, have made it more difficult than ever to just get a job and to earn a living wage. So have patience with the situation. That doesn't mean though that they have unlimited grace.
Mike:So just be mindful if they're buying $80 appetizers at some nice steakhouse while living at home because they can't afford their life, consider a family counselor having a hard conversation and allowing them to go out on their own. And if they say, well, I just needed that, then perhaps there are coping mechanisms that are lacking for their ability to take on life. And I I mean, that's just the harsh reality. Yeah. So there there's just there's a balance there.
Mike:Be very careful of that. You don't want to enable codependency or bad behavior with the young kids, but you want to be understanding of that. Now, you want to help them buy their first house, if you want to help them get started in certain areas, that's fine. I think the around one third of of people, of of parents are supporting around 14 to $1,500 a month in adult child. So just know it's it's increasingly normal be and the job market is really rough out there.
Mike:But you want to you you wanna be kind and not nice. Let's define that.
David:Oh, yeah. That's interesting. So
Mike:being nice is whatever they need, you're gonna help them with. Yep. Kindness is holding a boundary with civility. You wanna figure out what is right, you're okay ruffling feathers, but the goal is best healthy path moving forward. Kindness is how you help your kid grow.
Mike:Niceness is how you create a codependent relationship where they're gonna have a there's a failure to launch, and that's not what anyone wants. Okay? So that's that side. Set them on a path to to get out, be patient with it. Now for the older generation, this is tough.
Mike:You've you've also got to hold a boundary with civility because you can't drain your retirement to save your parents' retirement. This is where you have the hard family conversations about once their money's out, how do you handle Medicaid? Or if if they do have money, how is it managed and how is it managed appropriately? I tell you what, a few red flags that I've seen, these are just stories.
David:Alright.
Mike:But I've heard about like 80, 80, 82 year olds being told to buy fourteen year annuities. Oh. What are they gonna do if if it's illiquid until I mean Yeah. Till their mid nineties?
David:The odds are aren't looking good there.
Mike:You've got like three, four years left of life on average. Maybe maybe they're doing healthy. Maybe maybe they're very healthy. So and and maybe like we had a situation where someone had a bunch of a a large portion of their assets in a variable annuity that had high fees, and it was funded by non qualified assets. So if we drained it, they'd pay income tax on all of the gains, which was, like, $253,100,000.
Mike:So we put it into a new annuity and then turned on five year payments because if you do that, they're splitting up the gains and the basis so it smoothed out the tax burden over five years. It wasn't to sell them an annuity. It was to structure the payouts so taxes were easier. So you have to wonder, well, what should their what should their finances look like when when you're in your 75, 80 years old or older? It's a very different situation than if you're 60 years old and you've got thirty years ahead of you.
Mike:So be very careful of that. But yeah, these these are tough situations. Don't sacrifice your own retirement to save your parents. Your job is not to save your parents. It's to be there as needed, but and this is where you can create resentment unintentionally, and that's If a child takes care of their parent, there's often some sort of imbalance in the relationship that's not appropriate.
Mike:Parents take care of kids, and then those kids become parents, and they take care of their kids. That's kind of the way it's supposed to be. There are exceptions to the rule, but be very careful of that. Plan your retirement, hold boundaries with civility, have the conversations with siblings, and make sure that you're not missing your vacations because you're taking care of a parent. If you want to go on a vacation, you coordinate with other kids, and if they're unwilling to help, then I mean, do they lose part of the inheritance?
Mike:Or is it Yeah. Probably, maybe not not that extreme, but do you get where I'm going? Sure. Like, you can't have your cake and eat it too. If you're gonna have part of the inheritance, everyone takes care of mom.
Mike:Right. Everyone takes care of dad.
David:Right.
Mike:So it's it's a tough tough balancing act. Many people are gonna have both. You have to start with your needs, then if you're married, you and your spouse's needs. Then you look to family needs, would be then parent and or child needs. And the parent and child needs cannot supersede your own needs or your relationship needs.
David:You know, some people would say, oh, but I don't I don't like conflict, so I'm just gonna totally withdraw. How can they overcome that, like, that uncomfortableness with, you know, quote, conflict?
Mike:Well, there's there's yeah. Great question. Two ways. One is you become comfortable with conflict. Now, oh, Mike, that's a harsh thing.
Mike:No, it's not. It's the active avoidance of conflict and or contention causes you to recede into a place of helplessness to where you're worse off. You cannot get healthy and lay in bed all day. Alright. You cannot receive nutrients and avoid vegetables.
Mike:I mean, guess you could do vitamins. Yeah. But you like, you have to take your vitamins to in one way or the other. Vegetables, pills. Yeah.
Mike:So so there there are certain things in life that have to be done. And if you this is the expression, nice guys finish last, that doesn't mean jerks finish first. What it means is, if you're nice, you have no boundaries, you will be taken advantage of. If you're taken advantage of, you will be put last, and you will be in a worse off position. So it's maybe we should do, like, a course on this.
Mike:I mean, I've got the book How to Prepare to Retire On Time coming out soon, but this would be an interesting course on how to have conversations. Yeah. Then the ones we've facilitated, we have rules of engagement. So there's no sarcasm, there's no judgment, there's no criticism, and and there's no relating. So you say, oh, I'm having a hard time.
Mike:I'm having a hard time too. No. No. It's about that person. Then we create a structure of engagement with questions that can be asked and additional insight so that we can establish what do we want to accomplish.
Mike:And then the mediator, or the person is then asking, okay, what do you want? Why is that? Contacts, great. Next person, what do you want? Why is that?
Mike:Great. And you're establishing the baseline, and then you say, alright, so here's what we want, here's what someone has to give up, and and you start working through it. So you can bring a third party in there, you can kind of create the rules of engagement protocol and then engage that yourself, but at some point you have to be willing to have a hard conversation. Now, you may not be able to have that the harshest conversation right now, But you can start with smaller moments of conflict. Okay?
Mike:So here's an example. I'll I'll use an example. I was at a hotel last night. Okay? So I walked into the room, and it smelled like someone smoked in there.
Mike:K? Now, I can either just live with it, and I would have been fine living with it, or I can go back, and that's a small version of conflict. I'm now inconveniencing the people at the hotel to give me a new room. Now, I'm I'm I'm being a little facetious with that. I'm inconveniencing the people that I'm paying.
David:Yeah, yeah,
Mike:Right? That's a normal thing though. In our society, we are so painfully nice that we we suffer, and all I did I just walked up and said, Hey, it smells like someone smoked in there, or they smoked a huge pack of cigarettes, and then went in the room and stayed there the night. Can I get a room? They said, No problem.
Mike:It took thirty seconds. They gave me a new room. The room smelt clean. All was well. So if you if you start with smaller experiences, smaller moments where you defend a boundary, say, well, I kind of need this, then you're gonna be more willing to then have more conflict and so on.
Mike:But you have to practice it before you become comfortable with aggressive conflict. If you don't, then you end up in a state of fight, flight, freeze, faint, which means you've lost your critical analytical thought, and now you are just venting, bullying, you're you're just going at it. There's nothing productive about it. That's an addictive behavior that creates a lot of contention, not conflict. Conflict solves it's it's the argument to solve the issue.
Mike:Contention's just people belittling each other, just arguing, just for the sake of arguing. So you wanna be careful of the difference there. Yeah. Maybe we should do a course on this at some point. But but it is Constructive.
Mike:It is tough. Families today, in my opinion, mostly do not know how to communicate. Mhmm. Because once you leave the household, you get used to your way of things. So when you come back together, even the holidays or somewhere else, everyone's got their own set of different rules.
Mike:And unless you have to come together, and you establish those rules that you're all okay following, yeah, these things can go pretty rough pretty quickly. So and and we get the I mean, every time it's, well, your financial adviser wants to sell us something, and we have our financial adviser. Let's have him do it. Then we're like, who cares? Don't work with a financial adviser to solve these things.
Mike:Hire a mediator. Yeah. Hire a random third party coach that's indifferent about it, but you either need to get a a professional to do this for you or you need to learn this skill. But I will stand with my my original, opinion in that you need to learn these skills. And if you have codependent children and you're noticing that pattern and or you're getting all the burden of a parent because no other sibling's stepping up and you're avoiding the conversation, you will continue to be put last until you learn how to have conflict.
Mike:Learn it.
David:And is it is it your experience that once you do learn it, does it become easier? Is it do you get a comfort level with it if you've been sort of if you've had an aversion to it your whole life?
Mike:It's a learned behavior. You have to learn it. Those this is my observation. Those who are comfortable with conflict, they're not jerks. Yeah.
Mike:They ask questions. They they inquire. They're they're communicating, they're exploring ideas, they know what they want, but they're open to the different ways of getting there, and they're going to include and ask and engage other people to get there, and they're okay with a few people with their feelings being hurt. They weren't being offended. They weren't nothing was being mean.
Mike:It's just some people are gonna get upset because their way didn't work out. But they're comfortable with that because they want to do what is right. Those people are the more successful people in life. There is a direct correlation anecdotally of people that avoid conflict, have less opportunities in life, they have less money saved, they have I mean, they're just they are worse off. You don't become wealthy, not just in the sense of richness, but in opportunity, control of your time, even assets.
Mike:You don't get that unless you're willing to hold a boundary because that means everyone's taking advantage of you. You're paying out more than you're receiving. Kindness wins. Kindness goes with conflict. Niceness avoids contention, avoids conflict, you're put last.
Mike:Being a jerk, you might do better than being nice, but it's not as good as being kind. And I will say unanimously with every person that I have visited with, the people that are getting they're looking for 50 k to 500 k a month in income, the ultra wealthy. All of them were kind. They were intentional. You had they gave you a 100% of your attention or of their attention when they spoke with you.
Mike:I mean, they they all understood kindness and how to have healthy conflict. The most emotional people I've met with, not so much. The more emotional people, their emotions control their behavior. If their emotions control their behavior and they're a jerk, they may have done well in saving, but not nearly as well as they could have. And those who are nice, it's almost unanimous.
Mike:Hey. We've had a great life. My kids had you know, we we this is almost a quote from someone I spoke with about a year ago. I'll never forget it. We've had a great life.
Mike:My kids wanted for nothing. We took vacations. We explored everything. Have no regrets. But I'm 50 at nine years old, I need to start saving for retirement.
Mike:I said good luck. Yeah. Maybe you can retire at 80. Yeah. Live off of Social Security and have a little bit of a blanket.
Mike:Maybe 70. If you really don't spend any money, can live off of Social Security, but even then that's a stretch. You're not gonna live well. You have to learn how to have conflict. It's not even a should, you have to.
Mike:So, for people in these situations, kids or parents, you have to learn how to have healthy conflict. And here's something that's this is the last thing I'll I'll leave with this. When you start practicing a new behavior, let's say you've never held a boundary, now you're starting to hold a boundary, no one will believe you. It will be more difficult to hold the boundary at the beginning because they're not used to it. This is new behavior.
Mike:So just expect additional resistance. It's like I mean, if it's anything new, it catches people off guard. They're used to a certain way of things. So imagine if you're a family of just brutal sarcasm, it's almost like you wear it as a badge of honor, and you said, you know, I don't want to verbally abuse my siblings. I'm gonna stop engaging in mean sarcasm and just be pleasant.
Mike:They're all gonna think that something's wrong with you when you start. Uh-huh. A healthy person that walks into a room of unhealthy people will be viewed as the unhealthy person. That's wild. So understanding what a precept is, what a principle is, and what a framework.
Mike:So a principle is a universal truth. A framework is how to implement something. A precept is a principle with a framework. How to have healthy conflict, all of this, there are precepts that you can follow that guide you through this. Don't avoid it.
Mike:Don't kick it off. Don't kick it down the road. Like, start learning this behavior now. Any other questions, or did did we answer it?
David:I think we answered it. I think the bottom line was as you're helping your kids and or your parents, there have to be some some boundaries you're willing to defend, you know, in a in a civil way, in a kind way.
Mike:Yeah.