Self-Directed IRA Retirement

Are Your Grown Kids Ruining Your Self-Directed IRA Retirement?

Age Wave is one of the country’s thought leaders on issues relating to an aging population. In one of their recent studies, they discovered that two-thirds of parents fifty or older have financially supported a child 21 or older over the past five years. The average amount that they provided over one year was $6,800!  Putting that into perspective, if those parents had saved that amount each year for ten years, they would have accumulated almost $100,000 in their Self-Directed IRA, assuming a modest 6% annual growth rate. Most retirees would welcome that extra cash.

Everyone has heard about those boomerang children who move back home after college. Most of them are far from being financially independent, and many are sticking around much longer than their parents expected.

From another financial security survey—this one from Bankrate—it’s clear that these boomerang kids are often taking a substantial bite out of their parents’ retirement savings. The data shows a troubling trend of financial co-dependence between parents and children that include extended education costs, assistance with housing expenses, and a variety of other expenditures.

Most of the money that’s going toward helping grown children should be flowing into the parents’ Self-Directed IRA  instead. And these examples of parents helping their children at the expense of their retirement are not isolated. A full fifty percent of respondents to the survey indicate they are sacrificing or have already sacrificed their retirement savings to help their adult children financially.

When should kids pay their own bills?
Survey respondents came from the Silent Generation on down to Gen Z. Most agreed that 18 or 19-year-olds should be responsible for their own car payments, auto insurance, cell phone bills, and credit card bills. Everyone agreed that 20-year-olds should be paying their subscription services. By the time they reach the age of twenty-one, these young adults should take on housing costs. And by the age of twenty-three, the survey said, individuals should begin paying for health insurance and their student loans.

Parents need to save more toward retirement

While half of Americans are covering their grown kids’ expenses, more than 20 percent of the country’s working people are not saving anything for retirement, emergencies, or other financial goals. Substantial barriers to saving included significant debt payments, slow wage growth, and the increasing cost of a college and post-graduate education.

As they get closer to retirement, many parents continue to sacrifice their financial futures so that they can provide a safety net for children who could be working, at the very least, part-time. No one can argue against the importance of saving for retirement, but it requires a plan that’s a combination of setting boundaries on helping grown children financially and investing for retirement efficiently. A Self-Directed IRA is an excellent start.

Self-Directed IRAs help you gain control of your retirement savings

Adding funds to a Self-Directed IRA while you wean your children off your bank account will get you headed in the right direction. Self-directed investors take control of their retirement by investing in alternatives such as real estate, tax liens, private lending, precious metals, private stocks, and even cryptocurrencies.

The investors who chose self-direction enjoy making their own investment decisions. They are comfortable investing in things they can understand like real estate–both residential and commercial—and gold or silver. They also appreciate the diversity that these investments bring to a portfolio that may have been limited to stocks, bonds, and certificates of deposit.

Even putting small amounts of money into a Self-Directed IRA each month will help you reach your goals. Once you get the kids out on their own financially, you can step up your contributions to the legal limits.

Start by reaching out to the experts

Interested in learning more about Self-Directed IRAs?  Contact American IRA, LLC at 866-7500-IRA (472) for a free consultation.  Download our free guides or visit us online at