Today, many people are facing serious financial troubles.
A job loss - or a less than adequate part-time job - a divorce, a foreclosure or a smaller-than-expected retirement fund can make it difficult for many to make ends meet.
How would you react if a family member asked you for money? Before you make a decision, consider this: an estimated 40% of Americans are not repaid in full for the largest loan they ever made to friends or relatives, and more than 25% never receive any money back from their largest loan.
The National Foundation for Credit Counseling offers some suggestions to think about when deciding whether to lend or not to lend your retirement income to a loved one:

1. The impact on relationships among family members.
   What would happen if the borrower failed to repay you? If you're a parent, will your other children resent it? Remember, it's important to keep all loan requests confidential.
   
2. Are there other options? Could the borrower qualify for a bank loan? While not ideal, could the family member cash in their 401(k)? If the borrower can't qualify because of bad credit, you'll want to take that into account before making a decision to lend.
   
3. Don't be an enabler.
   Is this an unforeseen situation such as a job loss or is the borrower habitually in financial trouble? If so, you can be emotionally supportive rather than financially supportive.
   Perhaps help with creating a budget or suggest credit counseling to get on track.
   
4. Don't risk more than you can afford to lose.
   If you do decide to loan money to a friend or family member, consider it a gift that you'll never see returned.
   However well-meaning the borrower is, no one knows what will happen in the future.
   Don't loan more than you have.
   
5. Don't agree to co-sign a loan.
   When you co-sign a loan, you are agreeing to repay the loan even if the lender defaults.
   Depending on the age and responsibility of the loaner, the chances could be high that a default may happen.
   Protect your credit rating - and savings - and politely decline.
   
6. Do not tap into your retirement assets.
   If you have to risk your retirement savings to make a loan, don't do it.
   It doesn't help anyone if you deplete your hard-earned savings.
   
7. Involve your spouse or partner in the decision.
   If you and your spouse are not on the same page about the loan, it could cause significant stress on your relationship.
   
8. Create a formal agreement.
   If you lend the money, write a formal agreement that includes the amount of the loan, interest rate and payback schedule.
   If it's a large sum, consider using a lawyer.
   Be sure both parties sign the agreement; have it witnessed by a third person and notarized.
   
9. Understand the tax laws.
   The IRS calculates the minimum interest rate you must receive and requires you to declare that interest on your income taxes.
   If the IRS suspects that the loan is a gift, you must file a gift tax form.
   
10. Just say no.
    You're not obligated to lend money just because a family member asks.
    If you don't have the liquidity or simply don't wish to make a personal loan, politely decline.
    

Money is an emotional hot button for anyone.
If you decide to lend money to a family member or friend, carefully consider all the options and treat it as a business transaction.