Saving for retirement? Beware your relatives

A line in a press release last week couldn’t help but grab our attention: “A New Retirement Threat—Your Family.”

The release described a recent Guardian Life Insurance Co. survey on how people would pay large out-of-pocket costs associated with a major illness.  Among 18- to 24-year-olds, 62 percent said they’d turn to family members. That fell to 60 percent among 25- to 34-year-olds and to 46 percent among 35- to 44-year-olds. It dropped further for older age groups, presumably because they’d have more savings (or perhaps fewer older, well-off relatives to hit up).

By coincidence, the upcoming October issue of our CR Money Adviser newsletter will look at some of the tradeoffs people face in saving for retirement. Generally speaking, financial planners are pretty hard-hearted on this topic, urging prospective retirees to think twice before paying kids’ college tuition, wedding bills, or other expenses. One exception, though, might be those medical bills, when a child or other relative has no place else to turn.

Here’s some basic advice from Consumer Reports on handling medical debt.—Greg Daugherty

Greg writes the “Retirement Guy” column each month in the Consumer Reports Money Adviser newsletter.

Comments

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It amazes me that people suggested they would turn to family. Just exactly which family members can help them pay for major medical costs????