My children are my retirement fund.

This fallacy can be seen from a few perspectives:

  1. Financial Unpredictability: The future is generally uncertain. Your children might face their own financial challenges and may not be able to support you as hoped during your retirement years.

  2. Independence Risk: Relying on your children for financial support means giving up a portion of your financial independence. This could potentially put a strain on your relationships with them.

  3. Financial Pressure: It places unnecessary financial pressure on your children.

It’s not hard to see why people fall for this fallacy, particularly in cultures where filial piety is instilled from a young age. Emotional bonds and familial expectations can easily cloud practical financial planning. It’s a comfort to think our loved ones can and will support us.

An appropriate financial practice implies adopting a sensible, proactive approach towards retirement savings. This includes creating an investment plan and regularly saving money for your retirement, relying on your own savings and investments, and maintaining an emergency fund.

Some resources regarding this topic include:

  1. “The Total Money Makeover: A Proven Plan for Financial Fitness” by Dave Ramsey. Book Link. This book provides a holistic view of personal finances and guides you towards financial independence.

  2. “The Truth about Retirement Plans and IRAs” by Ric Edelman. Book Link. It offers a specific focus on developing a robust retirement plan.

  3. “The 5 Years Before You Retire: Retirement Planning When You Need It the Most” by Emily Guy Birken. Book Link. A valuable book to read especially when you are nearing your retirement.

  4. “The Millionaire Next Door: The Surprising Secrets of America’s Rich” by Thomas J. Stanley and William D. Danko. Book Link. This book provides interesting insights into how America’s rich manage their finances and prepare for retirement.

  5. “Saving for tomorrow, tomorrow” by Shlomo Benartzi. Ted Talk In this TED talk some common fallacies about saving are exposed and an automatic strategy to fix the system is proposed.