Key Takeaways
- Understand your financial capacity and set clear expectations before factoring family into your retirement plan.
- When coordinating retirement with a partner, align lifestyle goals, timing, and income differences.
- Avoid underfunding your retirement to pay for your children’s education; other financing options exist.
- If you plan to support aging parents, long-term care is often the biggest financial risk.
According to the 2025 Protected Retirement Income and Planning (PRIP) Study, 43% of Americans aged 45 to 75 financially support at least one family member, and more than half say that doing so negatively impacts their retirement savings.
If you’re interested in providing financial support to your loved ones, this guide will help you factor family into your retirement plan—without undermining your future.
Define Family’s Role in Your Retirement
Before factoring family into your retirement plans, define your own retirement first. Clarify the lifestyle you want, what it will cost, and how close you are to funding it.
This helps you determine how much support you can offer without compromising your own needs. From there, list potential family support goals and prioritize what matters most.
For example, your top priorities are helping your lower-income spouse retire, covering college for your children, and setting aside resources for your aging parents. Knowing how much surplus you’ll have in retirement will help you allocate appropriate resources to each one.
That said, these aren’t plans you should make in isolation. Your family’s expectations and boundaries will shape them, making proactive communication essential.
Some important points to clarify might include:
- When your partner hopes to retire, and what kind of lifestyle they want
- Where your children would like to go to college (in-state vs. out-of-state options)
- Whether your parents are open to moving back in with you as they age
Tip
If family members are resistant or sensitive to money conversations, try personalizing your approach. For example, when talking to proud parents, framing the discussion as a request for their advice may encourage them to engage.
How to Factor Family Into Your Retirement Plan
Once you’ve defined your capacity for supporting your family in retirement, you can start making plans to accomplish your goals. The following sections address common family-related priorities and how to approach them.
Coordinating Retirement With Your Partner
Coordinating retirement with a spouse or partner often involves navigating differences in timelines, income, and lifestyle expectations. The key is to address those differences early and develop a shared strategy to align them.
It’s often easiest to start with lifestyle expectations and work backward from there. Talk through how you envision retirement, such as whether you’d like to travel, downsize, or maintain your current routine.
These goals will naturally inform your optimal retirement timing. For example, if taking extended international trips together is a must, you may want to avoid one spouse working much longer than the other.
Note
According to the Center for Retirement Research at Boston College, the average retirement age is 64.6 years old for men and 62.6 years old for women.
It’s also important to consider the impact that timing would have on your finances, particularly if there’s a large income gap. For example, it can be beneficial for higher-earning spouses to delay taking Social Security to maximize survivor benefits for the lower earner.
With so many competing factors, it’s important that you be willing to compromise and pivot as circumstances evolve. If you’re struggling to balance everything, consider working with a financial advisor who can help you build a cohesive plan.
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Funding Your Children’s Education
Of all family members, children are often the ones we’re most willing to sacrifice for. In 2025, roughly 39% of American parents reported that paying for their children’s education was their top financial goal, even above saving for retirement.
While admirable, you shouldn’t cover your children’s education at the cost of your long-term financial security. There are many ways to finance college, including scholarships, grants, and student loans. However, there aren’t nearly as many solutions for retirement shortfalls.
Underfunding your retirement may ultimately place a heavier financial burden on your children. Supporting you later in life may outweigh the benefits of help with college. In many cases, the most valuable gift parents can give is long-term self-sufficiency.
When balancing these two competing goals, 529 plans are one of the best tools for maximizing what you can put toward your children’s education. These accounts offer tax-deferred growth and tax-free withdrawals for qualified education expenses.
Using the funds for non-qualified purposes can trigger taxes and fees, but beneficiaries may be able to roll unused balances into a Roth IRA.
Important
The One Big Beautiful Bill Act increased the annual 529 plan withdrawal limit for K-12 expenses from $10,000 to $20,000. It also expanded the definition of qualified K-12 expenses to include several non-tuition costs, including books and tutoring for students with disabilities.
Caring for Your Aging Parents
If supporting your parents as they age is something you’re willing and able to do, it’s important to start planning early. The process is much easier when your parents are still healthy enough to meaningfully participate in decisions about their future care.
One of the most significant risks to plan for is the possibility of needing long-term care. The Department of Health and Human Services estimates that about 70% of Americans who reach age 65 will require some form of it, and the costs can be substantial. Here are the average rates in the U.S. for several common variations:
- Home care: $51,480 per year
- Assisted living: $66,132 per year
- Nursing home: $112,420 per year (for a semiprivate room)
In many cases, the most efficient way to manage this risk is through long-term care (LTC) insurance. This is another reason to get started early, as age or health issues can drive up premiums or limit your parents’ eligibility.
Another option to consider is life insurance with living benefits or a long-term care rider. In addition to paying out when your parents pass away, these can help cover long-term care costs while they’re still alive.
If you have siblings, try to include them in planning conversations with your parents. Coordinating responsibilities can help you share the financial and emotional burden.
Should I Save Money To Take Care of My Elderly Parents?
It can be difficult to balance saving money to support your elderly parents with other priorities, like funding your own retirement or your children’s education. In many cases, a long-term care or life insurance policy with the right riders is a more efficient solution.
How Do You Factor Inheritance into Retirement?
Factoring a potential inheritance into your retirement plans is risky because the timing and amount are uncertain. As a result, it’s often beneficial to make conservative assumptions and avoid making plans based on funds you may not receive.
How Much Financial Help Can You Give Family Without Hurting Your Retirement?
How much financial help you can give depends on your retirement savings, your timeline, and how steady your income is. It’s usually best to ensure your own retirement goals are fully funded before using extra savings to help others.
If helping family means you have to cut back on retirement savings or delay retirement by a lot, it might not be a sustainable choice. By setting clear limits from the start, you can protect your future while still finding ways to support your loved ones.
The Bottom Line
Factoring family into your retirement plan requires clear communication and realistic boundaries. Supporting your children’s education or your parents’ long-term care can be meaningful, but it shouldn’t come at the expense of your long-term security.
Instead, make sure to balance family support with your and your partner’s financial needs. If navigating those competing priorities becomes challenging, a financial advisor can help you manage the complexity.