The importance of teaching children about financial security and retirement is a significant one. It is important that children learn the value of money and how to manage it. Teaching them about retirement will help them understand the importance of saving for their future and how to plan for it.
It is not enough for a parent to teach their child about saving money, they need to show them what it means by setting an example themselves. They should talk with their child about the different types of investments and how they work and talk with them about what they are saving up for in the future. But when it comes to retirement, this is something that can be tricky. You’re saving up for the long future, the future that’s decades away. How can you teach a child the importance of planning for the future?
How do you explain the concept of retirement in a way that a child can understand?
The idea of retirement is often difficult for children to understand. Retirement can be a hard concept to grasp, even for adults. There are many ways that you can explain the concept of retirement in a way that children can understand. It’s just all about having patience and using real-life examples that they can grasp.
It can come down to simply explaining this:
- Why people choose to stop working
- What they do when they retire
- How they do it
- How long people spend in retirement
- Why saving for retirement is important
By breaking it down, you’ll have a much easier time getting them to understand the importance.
Don’t forget about the age
While it’s never too early to teach a child about the value of money and how much hard work goes into earning, it’s also important to know that it’s easier for some ages to grasp the concept of retiring and saving for retirement than others. Younger children such as 4 to 7 don’t entirely understand time or even the future for that matter. But once they’re older, they have a very solid understanding and begin to think ahead anyways.
So depending on their age, you can discuss why they need to save, why it’s important to have a job such as a live in care jobs, why you need to stay healthy, and why financial health is a must.
Get them to start saving
You don’t want to push your little one to begin saving for their retirement right away but teaching them the value of money and the importance of savings is a tip they’ll never forget. You can either open up a child-friendly savings account or even just purchase a cute little piggy bank for them so they can save up that way too.
Get the grandparents to help
If their grandparents are retired, then they can talk about their first-hand experience working towards retirement. Maybe they paid off their mortgage to reduce outgoings when they retired, or have they moved into specific retirement accommodation such as ERL Retirement Villages. They can talk them through why they made this decision. Not only is this going to be some fun quality time with the grandparents, but this is also a great way to give that nice push of talking to someone who is actively retired.