Celebrating Over 21 Years of Excellent Service
Call Today : (866) 639-0066
Call Today :
(866) 639-0066
Celebrating Over 21 Years of Excellent Service

My Parents Have No Money For Retirement

Most millennials and working youngsters today have parents who are close to retirement age, many of whom do not have a sufficient nest egg to see them through their golden years. The responsibility for your parents’ care and comfort (as well as their debts) could fall on you if their retirement planning strategy falls short of their actual requirements.

It’s important for you to understand where they stand in terms of social security, pension funds and savings, so you can plan for potential expenses in the future. Whether they live with you, on their own or in a retirement community, you may need to budget and save today so your parents are comfortable and secure tomorrow!

When you’re trying to help your parents with retirement planning, it’s crucial to understand where they stand. This helps you work out real solutions for issues like debt, healthcare and day-to-day expenses, in addition to providing them the financial independence and “space” they desire.

Offering a supplemental income source could not only wound their pride, but also create a mutually harmful dependency. This is a larger risk if the reason for insufficient retirement savings is bad money management or unnecessary expenses.

Start by asking where they have parked their retirement nest egg, if at all. For instance, have they invested in:

1. Insurance

Not just life insurance, but additional coverage for potential medical issues that arise with age. Long term care insurance may be expensive, but a prolonged illness or disability could eat into their savings and your own!

2. Retirement Funds

Ask whether (and how much) your parents have invested in IRA and 401K plans. Help them make the most of contribution limits and tax breaks, even if they’re uncomfortable telling you how much they’ve saved.

3. Debt Repayment

If mortgages or outstanding loans are paid off, that’s one less thing to worry about later. If not, it may be time for gentle encouragement, so your parents aren’t saddled with debt when they’re no longer able to work.

Helping Your Parents with Retirement Planning

  1. Meeting an Advisor
    A third-party financial advisor can not only look over your parents’ investment portfolio and rebalance it if required but also minimize any awkwardness they feel discussing finances with you.
  2. Updating Wills and Trusts
    Get a lawyer to help your parents with wills, trusts and other estate planning documents. Existing paperwork should be up-to-date, your parents should consider a power of attorney as well.
  3. Maximizing their Savings
    Encourage your parents to save as much as possible, making frugal living choices now so they have financial security later. Check their budget for unnecessary expenses that can be trimmed.
  4. Boosting Retirement Income
    Delaying retirement by a few years, continuing to work part-time, making smart investments, and exploring business opportunities can all help boost income both before and after they retire.
  5. Preparing Yourself As Well
    No matter how well you plan, there’s no way to guarantee that your help won’t be needed somewhere down the line. Plan your own finances and savings, so you can help your parents when they need it.
Early planning will help you prepare against the financial impact of their retirement, if they can no longer care for themselves at any point. Even if it doesn’t feel like any of your business, you definitely need to consider your parents’ retirement plan and help them get it on track (so you don’t end up being it!).

FAQs

How do I fund my parents retirement?

In order to avoid taking excessive withdrawals from your retirement savings and investments, it can be helpful to have alternative sources of income, such as Social Security benefits, rental income, cash from a life insurance policy, and dividends from stocks. These additional sources of income can assist you in maintaining a more stable financial condition and avoid depleting your savings too quickly.

What happens to seniors who run out of money in retirement?

Seniors often face substantial difficulties when they run out of money during retirement. Without enough money, they can find it difficult to pay for basic necessities like food, shelter, and medical care. To receive healthcare treatments and find inexpensive living choices in such circumstances, elders may need to rely on government assistance programmes, such Medicaid or subsidised housing.