It’s no secret that retired parents want to connect with their children and grandchildren, but when loved ones live out of state, the cost of traveling for visits can add up — and even put a financial strain on families.
Let’s take Amy for example. She’s 71 and retired with modest savings. She lives two states away from her only daughter Wendy, her son-in-law and their two children.
Wendy typically covers her mother’s travel costs, but Amy is now asking to come more often — up to six times a year. While Wendy wants her children to spend more time with their grandmother, the repeated requests for travel cash have Wendy worried about the impact on the family budget and her own retirement savings.
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“There’s an important distinction between helping with a genuine need and taking responsibility for a parent’s discretionary spending,” Daniel Preston, founder of LiveInCare USA, an online care matching platform connecting families with caregivers, told Moneywise. “If an older parent needs help with food, housing or care, families may understandably feel a strong obligation to find a solution. Yet paying for additional leisure travel is different.”
Weighing wants versus needs
In short, family and financial experts say the answer is a response built on tough love and rational budgeting.
“The easy test is always needs versus wants,” Eric Croak, a financial planner and president of Toledo, Ohio-based Croak Capital, told Moneywise. “Shelter, medicine, food and utilities are needs. Four or five visits per year is a want.”
For Wendy, the harsh reality is that an $800 peak-season round-trip airfare that her mom takes six times per year costs $4,800. “That’s real money,” Croak said. “But a family that names the ‘needs versus wants’ bucket honestly, can then fund it honestly.”
Wendy’s job is to recognize three key household cash management indicators that could derail her family’s long-term savings program.
“The three big red flags include spending your emergency fund to pay for a parent’s travel, reducing your 401(k) contributions to below the employer match threshold and running a balance on a high-interest credit card to pay for family expenses,” Croak noted.
Triggering any of those red flags indicates that the help Wendy is providing is coming at the expense of her family’s financial future.
Needs come before wants in most family arguments, but the priority list should still go: emergency fund, employer match, paying down high-interest debt, then college savings, then money for parents. “In short, nobody’s future is helped by an unfunded retirement,” Croak added.
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Setting clear boundaries
To avoid future negotiations about each visit, family care specialists advise setting boundaries ahead of time.
“For instance, the daughter could say, ‘We are willing to assist you financially for two annual visits, but any additional trips beyond these two visits would fall under your travel budget,’” Dr. Alexandra Foglia, director of family programs at All in Solutions, a network of treatment centers across the U.S., told Moneywise. “Establishing a set number or dollar figure for each visit eliminates any potential for misunderstandings and reduces the likelihood that the conversation will become too personal.”
Additionally, Amy and Wendy could always offer alternative solutions available to reduce costs associated with long-distance visits. “That could mean sharing the cost of airfare, reducing the frequency of visits while increasing the length of each stay, earning and utilizing reward points, or choosing less expensive options for visits,” Foglia said.
Parental emotions can tug hard on the heart, but Wendy’s best move is likely to help where she can while setting firm boundaries about covering her mom’s travel expenses.
“Paying for your mother’s flights is not as important as paying for your future,” George Dimov, founder and CEO at Dimov Audit, a New York City-based tax specialist firm, told Moneywise. “You can borrow money for things, but you cannot borrow money for your own retirement.”
To ease any guilt about saying ‘no’ to Amy’s frequent requests for travel money, Wendy can do the math and make a call based on the numbers.
“Don’t think about this decision as a feeling, think about it as a fact,” Dimov advises. “Write down how much money you have and how much you can afford to spend on your mother’s flights, and set that as the standard.”
While this decision won’t pay for all of Amy’s flights, it will help Wendy and her husband pay for the kids’ college and fund a solid retirement, while giving her mother a clear answer.
“It’s easier to say, ‘here is what we can do’ than to say ‘no,’” Dimov added.
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Brian O'Connell is a US based former Wall Street bond trader and author of two best-selling books: "The 401k Millionaire" and "CNBC's Creating Wealth". His work is featured on national finance and business platforms like TheStreet.com, CBS News, CNN, The Wall Street Journal and Forbes
