Financial Planning
The story of a third child

The story of a third child

We were talking about financial goals with a young couple having two kids. The couple was well educated and was having a good understanding of the world. Both the kids are under five years of age.

We were talking about the retirement planning of the couple. Looking at the maturity level, I was expecting that they will share the plan, they already made for their retirement needs. However, they had different dreams and plans.

They shared that their foremost priority is to provide the best level of education to the kids rather than retirement planning. I affirmed their thought process, that is fine, but planning for your retirement should be on top of the agenda too. They emphasized that they want to send their kids to a high level of school and send them for higher studies abroad. They said we want to ensure that they get that high level of education. This will lay a strong foundation for a kid’s life.

I affirmed again, that’s good, that you want to do this way, but what you are doing to secure your post-retirement needs. They replied we are not thinking on those lines rather we don’t have the budget left to think about this goal.

I enquired, well, do you plan to have a third child. The couple raised eyebrows toward me, queried what kind of question is this. Who nowadays think this way. I reverted, be calm, just a question. I said further, let’s suppose you have a third child, will you give her the same level of education and all the comforts as you give to the two kids. They said, obviously, yes. We will not leave any stone unturned to ensure this. But, again, we have no such plans.

I said, great, I agree. If I ensure you that this third child will always take care of you all your financial needs post your retirement. Well, they laughed while saying, nobody can give that assurance, what a kid will do and what he or she will not, when we will be old.

No, I suggested, that’s not the point. Let’s think of having this third child as today’s investment basket. You need to save a similar amount, the amount you spent on one kid’s education. This way you will have your third child which will take care of your retirement needs. They said, yes, we agree, now we got your point and yes, we are sure about our third child. I could see the glow in their eyes this time.

So, friends, plan for retirement today, thinking of it as a third child. You deserve the best too!

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