<p>Most of us tend to think of sacrifice as a GOOD thing. Not always true.
My MIL , in her late 80s, refuses to go into a group retirement setting. She is very lonely and admits she would love the social contact. But she doesn't want to spend the "kids inheritance" to enhance her lifestyle, even though we've told her we don't WANT or NEED her inheritance. We would rather she be happy. But no she won't do it...and she's miserable and sad pretty much every day.<br>
And those of us who think we are doing a good thing by shortchanging our retirement to pay for a dream school should think again. Our lack of money in our golden years may put us in the position of being a burden to our kids. Even having to depend on them to change our bed pans. No thanks.
Everything needs to be balanced. Sacrifices now can lead to burdens later.</p>
<p>Excellent response ranger. On a side note for your MIL. Convince her to give the inheritance money to her children/grand children now, while she is alive. There are plenty of ways to do it to get around taxes. I.e. Want to give a kid $50,000. If the child still has a mortgage on their house, she can go to that bank and pay on the loan. She could even buy the remaining mortgage from the back and become the lien holder. She could then just give the title to the kid and "Forgive" the loan. This is just one of many ways to give them their inheritance ahead of time.</p>
<p>Then, when she is stable with whatever money is left, she can use that, along with any residual income like social security and such to pay the assisted living facility. If she still has life insurance; that will still be in place for her heirs, or if she gave the heirs everything she wanted to ahead of time, she can set up a deal with the assisted living facility to become the beneficiary of the life insurance policy to pay them a lump sum after she's gone. This helps in many cases where people have a lot of money in insurance, annuities, etc... but have very little liquid cash. Anyway; some suggestions. It will take a MIL who is still pretty alert and willing to talk with a financial adviser or lawyer. Not a hard thing to do. Just has to be done correctly.</p>
<p>Back on topic; You are correct that sometimes doing what we think is good for our kids when they are younger; such as college; can actually come back to bite us in the butt later down the road. The worst things colleges and the FAFSA do to kids and parents is to figure out the family's contribution level. The best thing that could be done is to get the kid to become independent with a job and doing their own taxes and claiming themselves. Then, they can put in for college expenses on their own and not have to include their parents and their income and contribution. They can get a lot more aid that way. As long as the kid is a considered a "dependent" on the parent's taxes, both sides are screwed. The parent in turn; if they want to help the kid; can GIVE $10,000 each to the kid. That's $20,000 a year for mom and dad. They can claim it off their taxes as a gift. The kid can claim it, but because it is all for school and such, there won't be a lot of taxes owed on it. The parents can even pay any taxes to the kid as part of their "gift". Both sides do so much better.</p>
<p>Unfortunately, there are parents and kids who think that it's the parent's responsibility to pay for the kid's college expenses. It's not. It's the parent's responsibility to teach the kid to be independent and to survive on their own. Secondary is to teach them morals, values, ethics, and other sociological assimilation skills. Hopefully, in all of this, the kids will also learn compassion, love, kindness, sympathy, and empathy. Then, and only then, can you effectively die or not exist, and your child will survive the rest of their lives as a happy and functional member of society.If my parents die, they could leave me absolutely nothing, and it wouldn't affect me at all. If my parents got put into an assisted living facility or medical facility, it wouldn't affect me at all. They are financially independent and they taught me to be financially independent. Independence; in all things!!! What better gift could a parent give a child. Then when the kids "HELP" mom and dad, it's because they WANT to and not because they HAVE to.</p>
<p>Of course, this is all relative. If you have $500,000+ a year income with little or no debt and a secured financial future portfolio, then paying $50K a year for your kid to go to school is no big deal. I wouldn't do it, but I could understand it. Some rationalize it by saying they started an education fund for the kid when they were born. You could have $100,000 in that account by the time they reach 18. if you are in the $500,000+ a year club, it's not a big deal. It's too small of a percentage of your net worth. If you are less than that, then that is definitely not the wisest thing to do with that money. Banks and such will try and convince you it's a great deal, but it isn't. They just want your money. But parents rationalize it anyway. For those with little kids and considering it, you're better off putting that kind of money deeper in your 401K or other IRA type long term account. There's still clauses that allow early withdrawal for education, so if you want it you can. But if you don't want it for education; i.e. the kid gets a full ride; you don't have to change the money around. But my experience shows that those who work for their own education and wealth tend to be more self reliant people. They are in less debt. They don't owe high credit card balances. They don't live beyond their means. They live comfortably and are willing to donate and help others more. They are generally happier people.</p>