Retirees who want kids' help can't be a bottomless money pit

This column is the second of a two-part series addressing the financial support of retirement-age parents. 

If you’re terrified, I understand. Running out of money may have never seemed possible, yet here we are. Social security isn’t enough, you can no longer work and all other possibilities have been exhausted. You need more money. Banks are likely of no use. The question is whether the solution, or at least some relief, can be found on your family tree. Could, would and should your children help your desperate financial situation?

If it helps, you aren’t alone. Between health care expense increases, failing pensions and growing longevity, many retirement-age Americans are struggling. Once you turn off the faucet of work income, it becomes increasingly tougher to replace your once-reliable monthly cash infusion. Commonality aside, you still need a solution.

If your parents can't afford to retire, giving them money won't help

Inaction is not a solution, although it’s likely the most common path. 

First things first

For any financial conundrum, your first step is to determine whether you have a short-term or a long-term problem. In other words, does the passing of time solve your problem, or will the problem persist as long as your breath persists? If you have a short-term problem, it means a part-time job or temporary financial assistance will be enough to solve it. Waiting for a pension to kick in or waiting for Social Security retirement payments to start are the most common incarnations of short-term cash-flow crunches.

Anecdotally, short-term cash flow crunches for retirees are rare. If you’ve got a problem at 65, you’re likely to have a problem at 85.  Enter, your family.

Like billions of parents before you, you fought, scrapped and sacrificed for your family. You never asked for anything in return, but time has passed and your reality has changed. Assuming your younger generations are employed, at what expense should they help you?

Consider the consequences

That question is no less fun to pose than it is to read. It’s truly a break-glass-in-case-of-emergency moment, when someone else’s money becomes your only solution. Because when you consume someone else’s income, their financial goals suffer. Your grandson Timmy has less college money, your daughter Joan has to work two years longer, and your son-in-law Gary can’t take a vacation.

I don’t make this point with a vindictive spirit, but instead from a place of honesty. Before you tackle the question of could, would and should your family help you, you owe it to everyone involved to make sure you’ve truly eliminated superfluous spending. That’s easier said than done. Your decades of loose spending may have gotten you in this quandary.

Your financial life has never required more brutal honesty. If you’re going to receive financial assistance from someone else, be sure to save everyone the embarrassment of you haphazardly spending someone’s else's resources. The absolute fastest way to ruin a relationship is to accept money and burn it via wasteful spending.

3 questions to answer

Now for could, would and should.

First, for "could." If your family can absorb your financial needs, proceed to "would." If not, your plan falls apart immediately. More on that in a moment.

The next obstacle is "would." If you present your family with a feasible plan that is thoughtful and reasonably sustainable, your chances of "would" increase. If your plan isn’t actually a plan and appears to be a black hole of money, your chances for "would" decrease greatly, as they should. You owe your family a successful plan, even if they need to help you develop it. You should determine whether you need a chunk of money or monthly assistance. Take the time to understand the difference between the two.

Don't be debt delusional: Quit buying stuff you can't afford!

"Should" is actually the easy question … maybe. If the answer to "could" and "would" is yes, then "should" is also yes. But I believe everyone reserves the right to make that decision for themselves. Personally, if I were presented with a plan to assist a retirement-age loved one, and I could help them, I believe I should help them.

If your quest for help ended at "could," it’s time to turn your focus toward community-assistance programs in your area. Food pantries and other free-assistance programs are there for a reason, and if Social Security isn’t enough, you can’t work and your family can’t help, it’s time to take advantage of them.

The longer you wait to address glaring problems, the harder it will be to find a sustainable solution.

Peter Dunn is an author, speaker and radio host. Have a question about money for Pete the Planner? Email him at AskPete@petetheplanner.com