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Six Tips To Help Your Parents With Their Retirement – So You Can Too!

Six Tips To Help Your Parents With Their Retirement – So You Can Too!

By Rick Pendykoski

No matter how much you’ve put together in your financial retirement plans, it always seems like you need more.

What if, in addition to your own expenses, you also have to support your parents?

Statistics published by TD Ameritrade say that over a quarter of baby boomers are already supporting another adult, with close to 8% of the latter being retired parents!

If their savings and assets aren’t enough for your parents to retire with, you may end up providing care and financial help, derailing your own future plans as a result.

Here are 6 basic tips to follow, so both you and your parents can retire comfortably:

Analyze Their Finances and Savings

It can be tough for parents to open up about money troubles to their kids, but you can’t come up with a financial plan without knowing what you’re working with. Be clear – you don’t want them to struggle, continue working, or be a burden on anyone after retirement.

You may have to use tough love, or get a third party (like a financial advisor or retirement expert) to mediate. If they get defensive or emotional about the topic, remind them that they’ll feel much worse approaching you for financial help later!

Make Sure They Have a Home

No matter what, your parents should always have a home where they are comfortable, secure and well cared for. They’ll want to retain their independence, but at some point, assisted care becomes essential.

If you have siblings, sit down with them and discuss what to do when they can’t care for themselves. Retirement homes and assisted living facilities are expensive, so you could choose for them move in with one of you (which offers some surprising benefits for everyone concerned!).

Get Their Insurance Up-To-Date

If your folks haven’t bought enough insurance to cover medical expenses, long term care and other retirement costs, do it for them. Think of this as something you absolutely have to do, no matter what it takes.

Here’s why this is so important.

If you don’t invest in financial protection for your parents now, you could be paying through your nose for even the most basic retirement expenses later. Healthcare costs in particular are rising every day, so this is equally important for your financial stability and theirs.

Consult a Retirement/Financial Expert

If you want to help your parents build a rock-solid financial strategy, take them to meet with an experienced planner.

An expert’s advice about insurance, debt repayment, projected expenses, retirement plans or other financial vehicles can be invaluable.

However, make sure you visit a third-party advisor who won’t try to push certain products for a commission or financial gain. Ask friends, relatives and colleagues for recommendations about reliable and effective planners in your area.

Don’t Let Them Fall for Scams

If your parents are trying to boost their nest egg while retirement draws near, they may be tempted into making investments that promise huge returns (but are actually scams targeting the elderly).

Declining mental health may also affect their ability to make wise decisions, which is why scammers treat retirees as prime targets. Keep track of where and how your parents are spending money, become involved in helping them study investments or “deals”, and remain alert for any suspicious activity.

Keep Your Own Future in Mind

As they get older, you will feel some responsibility to your parents (or in-laws), and want to help them live out their retirement years in comfort and security. At the same time, you can’t put your own plans on hold forever.

If you do, you may very well end up relying on your children someday, all because your savings were exhausted in the process of supporting your parents.

Be clear about the limits of your support, ask your siblings to pitch in, and look for organizations who may be able to help if needed.

If you want to save while also helping your parents maintain their quality of life, encourage them to enhance their retirement fund now.

Remember, money isn’t the only kind of support they will need as they get older. Set aside time to spend with them as well – it’s precious and limited!

 

Rick Pendykoski is the owner of Self Directed Retirement Plans LLC, a retirement planning firm based in Goodyear, AZ. He regularly writes for blogs at MoneyForLunch, Biggerpocket, SocialMediaToday, NuWireInvestor & his own blog for Self Directed Retirement Plans. He writes about topics related to retirement planning, investing, and securing future.

 

 

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