John and June just celebrated their 40th wedding anniversary. Retirement is going great. After working hard and saving hard, they now enjoy travel, and have little worries since downsizing from their five-bedroom home to a nice little condo with zero maintenance. All is well in Mudville except for one little minor detail they never dreamed would happen: their oldest adult of three children, 38-year-old Eric, has fallen on hard times and could use his parent’s help now, rather than later.

As a retirement specialist with over 36 years in the field of finance, I’m noticing an interesting trend affecting  how and  when retirees start leaving (giving) money to their adult children. In the early days of my financial career, we ran the usual planning process of making sure that our retiring clients had plenty of money for the rest of their lives and then put the proper legal documents in place so that when they died, the remaining assets would pass on to their children. These retirees simply focused on what would be left to kids “after” death. Seldom did clients wish to talk about giving money to their adult children during their lives. Never were there discussions about giving money to kids now vs. later. But that was then and this is now. Today’s adult children are faced with a much different world than their parents, leaving my clients to think about giving more money to their children now as opposed to waiting till death.

Now don’t get me wrong;  it’s not like adult children are begging for more money now rather than later. However, given the fact that many adult children are struggling with money, and also, knowing that many of these children could use and enjoy the money now vs. later, many of my retirees are seriously considering giving money now. And for me, this makes perfect sense. Let me explain.

With unemployment at all-time highs, and savings rates at all-time lows, today’s young adults are faced with financial challenges in planning for retirement their parents never imagined. These new challenges actually germinated in 1978 with the creation of the 401(k) plan. Prior to the 401(k), most working adults’ retirement plans consisted of their employer-provided pension plan which would provide them guaranteed income at retirement that they could never outlive. Retirement over the years has been fairly simple: you work for a large company, keep your nose clean for 30 or 40 years, and then, on that magical day, retire with money that’s guaranteed to last as long as you do. All retirees had to worry about was not spending more than came in the mailbox each month.

Today is different. With pensions no longer available to most young adults, many are left to “go-it-alone” and save for themselves; something most cannot afford (nor want) to do. Add to this low-savings rate, the high-cost of living, the need for new and improved gadgets and gizmos and you’ve got a recipe for financial difficulties not seen before.

This is why I suggest retirees “re-think” the notion of stockpiling assets to leave to kids after they die, and instead, consider giving those same dollars to them now…at a time in life when they can use it.

As a retirement planning specialist who has personally met with over 15,000 Savers, many of whom are already retired, this is advice I find myself doling out more and more often.  The results, both for the giver and the givee, have been quite rewarding. For instance, I recently met with an 80-year-old client who expressed to me that she had plenty of income and too much money sitting in the bank. I asked her why she kept hanging on to so much money when she knew she wouldn’t ever spend it all. She couldn’t tell me. I suggested she give $100,000 to each of her three children now rather than later. Like most people, she had no idea she could do that without having to pay a bunch of taxes; which in her case, she nor her kids will (this is why you need to consult a retirement specialist before doing something like this). After helping guide her and her accountant on how best to pull this off, she now has the joy of watching her kids enjoy the money now rather than leaving it to them after she dies.

Moral to the story: a bird in your kids hand now may be better than two birds in the bush later. Believe me, most of them could use the help and you’ll enjoy watching them use and enjoy the money now. So why not get with a trained retirement planning specialist who can first lay out for you how and when to gift money to your kids and grandkids. It will not only be rewarding for them, but in a unique way, personally rewarding for you as well.

About the Contributing Author: 

Tony Walker is a bestselling author and retirement planning specialist based out of Kentucky. With over 2,500 clients, Walker is recognized in the industry as a pioneer in the field of retirement savers in how to best use and enjoy their money while they still can. He is also the author of his newest book called, Live Well, Die Broke.