One of the best ways to teach younger generations about retirement savings is to help them realize the power of investing. You can do this by helping them fund Traditional or Roth IRA accounts. Anyone who has W-2 job income, even from summer or part-time jobs, can contribute to an IRA, even if they are minors. The IRS sets contribution limits and periodically adjusts these amounts for inflation. Once a younger generation family member gets a “real job,” you might be able to afford to help him or her contribute to a retirement savings plan at work. Not only is this a good investment for the youngster but it may also be a good investment for you, insofar as the sooner you can teach younger generations about financial responsibility and the impact of consistent periodic investing, the better chance of your not having to help them out as much later in life.

Nevertheless, despite your good efforts, you may need to provide financial help to a young adult in need. Whether you are already helping or may want to in the future, keep these two caveats in mind. First, can you easily afford the outlay? I have received several disturbing emails from parents who themselves are living on the edge financially, but still feel compelled to help out their kids. While this may be a natural inclination, you don’t want to impair you own financial future. As callous as it may sound, you may simply have to say that you can’t afford to help. Second, if you are providing financial assistance, don’t let temporary aid turn into an annuity for the family member. You must draw the line somewhere or otherwise you will end up enabling the child who may come to view the periodic assistance as an entitlement. If that’s what you want to do and can afford to send money indefinitely, so be it, but still be wary of how this might adversely affect your child’s or other relative’s initiative and self-esteem.