As grown children move into their career-finding years, they don't all prosper equally--in a material sense. Some can use a helping hand; others are doing just fine, thank you very much. So how do you deal with the equity issues that raises? Can you hand out needed cash to the one in need and not give an equal amount to the siblings, even if they have no need for it?
Many families I've talked to about this come to one of two approaches: One is: If you give to one, you give to all. The other: To each according to his or her need. That's the route Paterfamilias and I have followed in our family. Recently, friends told us how that approach played out in their attempts to make sure each child would have an adequate savings base to fall back on--at retirement or if a financial crisis struck.
Here's what they've done: When each of their three children started to earn money--no matter how little--the parents insisted they open a Roth IRA account. (A Roth IRA is like a super-advantaged IRA. It's funded with after-tax dollars but allows for tax-free growth of earnings and withdrawals.)
In the beginning, the parents helped all three meet the maximum contribution level. Then, as each child prospered--or labored at worthy but low-paying jobs--the parents adjusted their Roth subsidies accordingly. They have not, as yet, discussed the varying contributions they make with their children, but they should--just to avoid any misunderstandings on why the big brother [a social worker] gets lots of help and baby sisters [a lawyer and an investment banker] no longer get any.
The quick answer is this: They are proud of their son's decision to work with the less-advantaged. They recognize that his work will never pay well and that he does not currently have the wherewithal to put money aside for retirement savings. This is their way of saying, stick with it. We'll help you set up a safety net--with a little assist from a favorable tax law.