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Get your kids on the right track

Posted August 31, 2023

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If you’re a parent concerned about your children’s financial futures, this guide offers key principles you can share with them for effective retirement planning. Although originally designed with Generation Z in mind, these core principles are timeless and relevant for anyone, including your children.

1. Emphasize the Advantage of Time and Compound Interest

The most incredible asset your children have is time. Compound interest works like a financial multiplier, making even modest initial investments grow significantly over the years. Urge them to start saving as soon as they start earning, no matter how small the amount seems. The sooner they begin, the less they’ll need to save each year for a comfortable retirement.

2. Encourage Participation in Employer-Sponsored Retirement Plans

If your child is eligible for workplace retirement benefits like a 401(k), it’s crucial they make the most of this opportunity. Many employers match contributions, effectively offering free money. Stress the importance of contributing enough to secure this full employer match—it’s an immediate, guaranteed return on investment.

3. Impart the Importance of Wise and Diversified Investments

Investing might seem intimidating, but it’s vital for long-term financial stability. Teach your children that diversification—spreading investments across various asset types like stocks and bonds—is key for reducing risk and maximizing gains. If they’re not sure where to start, recommend seeking guidance from reputable financial advisors like Thayer Financial.

4. Help Them Assess Their Risk Tolerance

Everyone’s comfort level with market volatility varies. Young people generally have a higher capacity to take on risk due to their longer time horizon for recovery. But it’s important for your children to identify an investment strategy that aligns with their comfort and long-term goals.

5. Advocate for a Financial Safety Net

Life is unpredictable. Encourage your children to build an emergency fund that covers at least three to six months’ worth of living expenses. This financial cushion can help them avoid withdrawing from their retirement savings during unforeseen events such as medical emergencies or sudden unemployment.

6. Promote Ongoing Financial Education and Flexibility

The economic landscape is ever-changing. Encourage your children to stay informed about retirement policies, investment strategies, and economic trends. Remind them that the plans they make today may need adjustments as they mature, change jobs, or undergo other life shifts.

7. Teach the Value of a Balanced Lifestyle

Preparing for the future is important, but so is enjoying the present. Help your children find a balance between saving for retirement and living a fulfilling life now. Smart budgeting can allow for both current enjoyment and future financial security.

By encouraging your children to start early and adhere to these key principles, they’ll be better equipped to build a secure and comfortable retirement for themselves. If you or your children have questions about retirement planning at any stage, Thayer Financial is available to provide personalized advice. Book a consultation through our website today.


Thayer Financial, L.L.C. (“Thayer Financial”) is a registered investment adviser offering advisory services in the States of North Carolina, Tennessee, Texas and in other jurisdictions where exempted. Registration does not imply a certain level of skill or training. This website’s presence on the Internet shall not be directly or indirectly interpreted as a solicitation of investment advisory services to persons of another jurisdiction unless otherwise permitted by statute. Follow-up or individualized responses to consumers in a particular state by Thayer Financial in the rendering of personalized investment advice for compensation shall not be made without our first complying with jurisdiction requirements or according to an applicable state exemption.

All written content on this site is for information purposes only. Opinions expressed herein are solely those of Thayer Financial, L.L.C., unless otherwise specifically cited. Material presented is believed to be from reliable sources and no representations are made by our firm as to other parties’ informational accuracy or completeness. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation.


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