Why You Need To Engage Your Kids In Retirement Planning & How To Do It Right

Recent national statistics on retirement in the UK showed that from April 2018 to March 2020, 57% of people below state pension age are already actively saving for retirement using private pension funds. This indicates the growing interest of people in investing their money and time into their retirement.

However, retirement is not the end-all or final years of a person’s life. LHH describes retirement as a point in life where you embark on a life filled with leisure after working to reach a financial goal. That being said, retirement doesn’t have to be filled with luxury and expensive belongings – unless that’s a personal goal. Retirement can be simply living a comfortable lifestyle, one where you don’t have to worry about finances. For some people, retirement can be travelling and exploring different places or serving time to help others with philanthropic activities.

Retirement can be anything you want to be, but you must start investing in your retirement plan as early as now and involve your kids in the process.

Why Do You Need To Involve Your Kids?

Involving your kids in your retirement plan will teach them valuable life lessons and skills. For example, it will allow them to learn about the value of money. If you open the topic of retirement plans, you can eventually start talking about why it’s necessary to save money for the future. Finance writer Kapil Rana explained that teaching your children financial planning will help them understand the family’s financial situation. When you need to adjust your spending habits, they can easily understand why the change is necessary.

Moreover, this teaches your children money management skills. Educating your children about finances will give them the confidence to solve unexpected financial challenges on their own in the future. This will also encourage them to start saving their money with their allowance, which will help develop healthy future money habits.

How Can You Encourage Your Kids To Get Involved?

If your child can understand the concept of money and saving, they will understand the importance of having retirement plans.

• Read Books on Financial Literacy
  Encouraging your children to read books that teach the concept of money will help them understand the basic concepts of saving. Fortunately, there is a myriad of children’s books about financial literacy. Books like Bunny Money, Get To Know: Money, and DK Eyewitness Books: Money are good ones to start with. As chartered financial consultant Bill Ryze suggests on The Street, however, these books would have to be age-appropriate to help children grasp financial concepts. Introducing topics that are too complex might put them off learning about money management.
• Enrol Your Children in Finance-Focused Clubs or Summer Camps
  Another method to increase your child’s financial awareness is by enrolling them in clubs or summer camps that will allow them to learn about saving money and socialising with others through life skills courses. You might even spark their interest in business or entrepreneurship like successful businesswoman Tessa Robinsonwho became a finalist in a prestigious business recognition competition. Apart from life skill courses, some classes will help your child learn more about their surroundings and discover their potential in music, art, and academics. With this, your child will not feel that learning about money is tedious.