Important Retirement Saving Tips to Teach Your Children

The retirement saving tips for children in this article are aimed to help you teach your child how important it is to be financially secure in their golden years. As with any lesson, this may take some time. But your efforts will provide a solid foundation for your children with earned income by teaching them how to save today to reach their goals in retirement.

Saving enough money for retirement is important. That statement is an absolute truth, yet somewhat mundane and largely underrated for many. Kind of like the words “I love you.” Anyone can say it and mean it. But, the proof lies in the actions that show love and, in turn, make those words meaningful and believable. Saying I love you is not enough. Showing someone you love them by continually cultivating the feelings behind the words, whether you’re dealing with your children, friends, or a spouse, is the foundation of successful relationships built on solid and lasting ground.

And so it goes for retirement planning. It is not enough when saving for retirement is important is just a mantra that you tell yourself and your children. Funds are not going to magically appear in any bank account or IRA on their own. You have to be prepared to act—consistently. But, first you have to learn how and acquire the discipline to act beyond mere intentions. You have to give them tips on saving for retirement and help doing so become a habit.

This is what we must teach our children. Today. However, take note: the lesson is not saving for retirement is important, but rather how to begin saving for retirement. And don’t just talk about the different retirement and investment accounts available. Show them how every dime they sock away into an IRA or other investment can mean the difference between financially happily ever after and the dismal alternative. Treat this as a critical life lesson—just as you would the importance of maintaining good health, making good grades, and teaching your children to be courteous, kind, compassionate, successful individuals.

With that being said, there are a few different ways your children can learn today how to become financially secure by the time they retire.

Did you know that any individual with earned income can have an IRA? Yes, that means if your three year-old daughter is being paid as a model she can establish and contribute to her own retirement account. Once your daughter becomes old enough to make her own decisions, she can use a self-directed IRA to acquire alternative investments that can potentially provide greater retirement income than the average stock, bond or mutual fund.

If young adults begin investing in their teens, by retirement age, they could be millionaires provided the investments were successful and thanks to compound interest. In fact, Dave Ramsey published an article a few years back that includes a graph that perfectly illustrates how compound interest can do exactly that. Read that article here. Print it out and explain it to your children. Invest enough of your own time and interest in them on the subject to encourage them to invest in their own financial futures.

Financial freedom at any age does not have to be just a dream. It can be a reality for those who have a plan, recover from failures, and continue pursuing and reaching their goals. Successfully retiring and achieving the quality of life you wish to lead during your later years is absolutely attainable if one understands and commits to the process that will get you there. This is what your children need to know, to understand, and to commit to early on.

If you have questions about this article or wish to learn more about self-directed IRAs, please contact us.

About Jack Callahan

Jack proudly earned his bachelor’s degree in finance and multinational business from Florida State University and his law degree from the University of Florida College of Law. He established Advanta IRA in 2003 and has steadily nurtured and grown the company and the team every year since. Prior to founding Advanta IRA, Jack delivered specialized counsel to real estate investors, small business owners, and real estate professionals on tax, legal and financial matters. As an industry expert, Jack is a frequent speaker on self-directed retirement plans. He is an accredited continuing education instructor for the Florida and Georgia Bar Associations, Florida and Georgia Real Estate Commissions, and The American Institute of Certified Public Accountants.